Simple Interest
Math MCQs

Question :    Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.

Correct Answer  $8346

Solution & Explanation

Solution

Given,

Principal (P) = $5350

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) = $5350 × 8% × 7

= $5350 ×⁸/₁₀₀ × 7

= ^{5350 × 8 × 7}/₁₀₀

= ^{42800 × 7}/₁₀₀

= ²⁹⁹⁶⁰⁰/₁₀₀

= $2996

Thus, Simple Interest = $2996

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 = $5350 + $2996

= $8346

Thus, Amount to be paid = $8346 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 = $5350

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5350 + ($5350 × 8% × 7)

= $5350 + ($5350 ×⁸/₁₀₀ × 7)

= $5350 + (^{5350 × 8 × 7}/₁₀₀)

= $5350 + (^{42800 × 7}/₁₀₀)

= $5350 + (²⁹⁹⁶⁰⁰/₁₀₀)

= $5350 + $2996 = $8346

Thus, Amount (A) to be paid = $8346 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 $5350, the simple interest in 1 year

= ⁸/₁₀₀ × 5350

= ^{8 × 5350}/₁₀₀

= ⁴²⁸⁰⁰/₁₀₀ = $428

Thus, simple interest for 1 year = $428

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $428 × 7 = $2996

Thus, Simple Interest (SI) = $2996

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5350 + $2996

= $8346

Thus, Amount to be paid = $8346 Answer

Similar Questions

(1) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?

(2) How much loan did Jessica borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6325 to clear it?

(3) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 7% simple interest.

(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.

(5) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?

(6) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.

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

(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.

(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 5% simple interest?

(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?