Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.

Correct Answer  $8580

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 8% × 7

= $5500 ×⁸/₁₀₀ × 7

= ^{5500 × 8 × 7}/₁₀₀

= ^{44000 × 7}/₁₀₀

= ³⁰⁸⁰⁰⁰/₁₀₀

= $3080

Thus, Simple Interest = $3080

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 = $5500 + $3080

= $8580

Thus, Amount to be paid = $8580 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 = $5500

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5500 + ($5500 × 8% × 7)

= $5500 + ($5500 ×⁸/₁₀₀ × 7)

= $5500 + (^{5500 × 8 × 7}/₁₀₀)

= $5500 + (^{44000 × 7}/₁₀₀)

= $5500 + (³⁰⁸⁰⁰⁰/₁₀₀)

= $5500 + $3080 = $8580

Thus, Amount (A) to be paid = $8580 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 $5500, the simple interest in 1 year

= ⁸/₁₀₀ × 5500

= ^{8 × 5500}/₁₀₀

= ⁴⁴⁰⁰⁰/₁₀₀ = $440

Thus, simple interest for 1 year = $440

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $440 × 7 = $3080

Thus, Simple Interest (SI) = $3080

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $3080

= $8580

Thus, Amount to be paid = $8580 Answer

Similar Questions

(1) William had to pay $3815 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.

(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7877.5 to clear it?

(4) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.

(5) If Richard paid $4176 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.

(7) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.

(8) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?

(9) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?

(10) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.