Simple Interest
Math MCQs

Question :    Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.

Correct Answer  $6612

Solution & Explanation

Solution

Given,

Principal (P) = $5800

Rate of Simple Interest (SI) = 2%

Time (t) = 7 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% per annum.

Method (1) Using Formula

Calculation of Simple Interest

Formula to Calculate Simple Interest

Simple Interest (SI) = Principal × Rate × Time

Thus, Simple Interest (SI) = $5800 × 2% × 7

= $5800 ײ/₁₀₀ × 7

= ^{5800 × 2 × 7}/₁₀₀

= ^{11600 × 7}/₁₀₀

= ⁸¹²⁰⁰/₁₀₀

= $812

Thus, Simple Interest = $812

Calculation of Amount

The total money paid to the lender by a borrower is called the Amount.

In other words, sum of priciple and interest is called the Amount.

Formula to Calculate the Amount

Amount = Principal + Interest

Thus, Amount = $5800 + $812

= $6612

Thus, Amount to be paid = $6612 Answer

Method (2)

Calculation of Amount when Principal, Rate of Simple Interest and Time are given

Calculation of Amount directly using Principal, SI, and Time

Formula to calculate the Amount

Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)

⇒ A = P + PRT

Here in the question, P = $5800

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 7 years

Thus, Amount (A)

= $5800 + ($5800 × 2% × 7)

= $5800 + ($5800 ײ/₁₀₀ × 7)

= $5800 + (^{5800 × 2 × 7}/₁₀₀)

= $5800 + (^{11600 × 7}/₁₀₀)

= $5800 + (⁸¹²⁰⁰/₁₀₀)

= $5800 + $812 = $6612

Thus, Amount (A) to be paid = $6612 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $5800, the simple interest in 1 year

= ²/₁₀₀ × 5800

= ^{2 × 5800}/₁₀₀

= ¹¹⁶⁰⁰/₁₀₀ = $116

Thus, simple interest for 1 year = $116

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $116 × 7 = $812

Thus, Simple Interest (SI) = $812

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5800 + $812

= $6612

Thus, Amount to be paid = $6612 Answer

Similar Questions

(1) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.

(2) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8856 to clear the loan, then find the time period of the loan.

(3) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.

(5) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.

(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.

(7) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?

(8) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?

(9) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?

(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.