Simple Interest
Math MCQs

Question :    Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.

Correct Answer  $9282

Solution & Explanation

Solution

Given,

Principal (P) = $5950

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) = $5950 × 8% × 7

= $5950 ×⁸/₁₀₀ × 7

= ^{5950 × 8 × 7}/₁₀₀

= ^{47600 × 7}/₁₀₀

= ³³³²⁰⁰/₁₀₀

= $3332

Thus, Simple Interest = $3332

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 = $5950 + $3332

= $9282

Thus, Amount to be paid = $9282 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 = $5950

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5950 + ($5950 × 8% × 7)

= $5950 + ($5950 ×⁸/₁₀₀ × 7)

= $5950 + (^{5950 × 8 × 7}/₁₀₀)

= $5950 + (^{47600 × 7}/₁₀₀)

= $5950 + (³³³²⁰⁰/₁₀₀)

= $5950 + $3332 = $9282

Thus, Amount (A) to be paid = $9282 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 $5950, the simple interest in 1 year

= ⁸/₁₀₀ × 5950

= ^{8 × 5950}/₁₀₀

= ⁴⁷⁶⁰⁰/₁₀₀ = $476

Thus, simple interest for 1 year = $476

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $476 × 7 = $3332

Thus, Simple Interest (SI) = $3332

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5950 + $3332

= $9282

Thus, Amount to be paid = $9282 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.

(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?

(3) What amount does David have to pay after 5 years if he takes a loan of $3400 at 8% simple interest?

(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.

(5) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.

(6) How much loan did Carol borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7755 to clear it?

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

(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 7% simple interest?

(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.

(10) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?