Simple Interest
Math MCQs

Question :  ( 1 of 10 )  Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.

Correct Answer  $8268

Solution & Explanation

Solution

Given,

Principal (P) = $5300

Rate of Simple Interest (SI) = 8%

Time (t) = 7 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $5300 × 8% × 7

= $5300 ×⁸/₁₀₀ × 7

= ^{5300 × 8 × 7}/₁₀₀

= ^{42400 × 7}/₁₀₀

= ²⁹⁶⁸⁰⁰/₁₀₀

= $2968

Thus, Simple Interest = $2968

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 = $5300 + $2968

= $8268

Thus, Amount to be paid = $8268 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 = $5300

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 7 years

Thus, Amount (A)

= $5300 + ($5300 × 8% × 7)

= $5300 + ($5300 ×⁸/₁₀₀ × 7)

= $5300 + (^{5300 × 8 × 7}/₁₀₀)

= $5300 + (^{42400 × 7}/₁₀₀)

= $5300 + (²⁹⁶⁸⁰⁰/₁₀₀)

= $5300 + $2968 = $8268

Thus, Amount (A) to be paid = $8268 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $5300, the simple interest in 1 year

= ⁸/₁₀₀ × 5300

= ^{8 × 5300}/₁₀₀

= ⁴²⁴⁰⁰/₁₀₀ = $424

Thus, simple interest for 1 year = $424

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $424 × 7 = $2968

Thus, Simple Interest (SI) = $2968

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $2968

= $8268

Thus, Amount to be paid = $8268 Answer

Similar Questions

(1) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(2) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.

(3) Robert had to pay $3286 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.

(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.

(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.

(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.

(9) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(10) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.