Simple Interest
Math MCQs

Question :    Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.

Correct Answer  $5800

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (SI) = 2%

Time (t) = 8 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) = $5000 × 2% × 8

= $5000 ײ/₁₀₀ × 8

= ^{5000 × 2 × 8}/₁₀₀

= ^{10000 × 8}/₁₀₀

= ⁸⁰⁰⁰⁰/₁₀₀

= $800

Thus, Simple Interest = $800

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 = $5000 + $800

= $5800

Thus, Amount to be paid = $5800 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 = $5000

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5000 + ($5000 × 2% × 8)

= $5000 + ($5000 ײ/₁₀₀ × 8)

= $5000 + (^{5000 × 2 × 8}/₁₀₀)

= $5000 + (^{10000 × 8}/₁₀₀)

= $5000 + (⁸⁰⁰⁰⁰/₁₀₀)

= $5000 + $800 = $5800

Thus, Amount (A) to be paid = $5800 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 $5000, the simple interest in 1 year

= ²/₁₀₀ × 5000

= ^{2 × 5000}/₁₀₀

= ¹⁰⁰⁰⁰/₁₀₀ = $100

Thus, simple interest for 1 year = $100

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $100 × 8 = $800

Thus, Simple Interest (SI) = $800

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5000 + $800

= $5800

Thus, Amount to be paid = $5800 Answer

Similar Questions

(1) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.

(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?

(4) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 4% simple interest?

(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.

(6) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?

(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.

(8) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.

(9) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.

(10) John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.