Simple Interest
Math MCQs

Question :    Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.

Correct Answer  $6148

Solution & Explanation

Solution

Given,

Principal (P) = $5300

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) = $5300 × 2% × 8

= $5300 ײ/₁₀₀ × 8

= ^{5300 × 2 × 8}/₁₀₀

= ^{10600 × 8}/₁₀₀

= ⁸⁴⁸⁰⁰/₁₀₀

= $848

Thus, Simple Interest = $848

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 + $848

= $6148

Thus, Amount to be paid = $6148 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) = 2%

And, Time (t) = 8 years

Thus, Amount (A)

= $5300 + ($5300 × 2% × 8)

= $5300 + ($5300 ײ/₁₀₀ × 8)

= $5300 + (^{5300 × 2 × 8}/₁₀₀)

= $5300 + (^{10600 × 8}/₁₀₀)

= $5300 + (⁸⁴⁸⁰⁰/₁₀₀)

= $5300 + $848 = $6148

Thus, Amount (A) to be paid = $6148 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 $5300, the simple interest in 1 year

= ²/₁₀₀ × 5300

= ^{2 × 5300}/₁₀₀

= ¹⁰⁶⁰⁰/₁₀₀ = $106

Thus, simple interest for 1 year = $106

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $106 × 8 = $848

Thus, Simple Interest (SI) = $848

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $848

= $6148

Thus, Amount to be paid = $6148 Answer

Similar Questions

(1) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?

(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.

(3) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?

(5) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.

(6) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 8 years.

(8) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 10% simple interest?

(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 8 years.

(10) How much loan did Thomas borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6670 to clear it?