Simple Interest
Math MCQs

Question :    Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.

Correct Answer  $6206

Solution & Explanation

Solution

Given,

Principal (P) = $5350

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) = $5350 × 2% × 8

= $5350 ײ/₁₀₀ × 8

= ^{5350 × 2 × 8}/₁₀₀

= ^{10700 × 8}/₁₀₀

= ⁸⁵⁶⁰⁰/₁₀₀

= $856

Thus, Simple Interest = $856

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 + $856

= $6206

Thus, Amount to be paid = $6206 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) = 2%

And, Time (t) = 8 years

Thus, Amount (A)

= $5350 + ($5350 × 2% × 8)

= $5350 + ($5350 ײ/₁₀₀ × 8)

= $5350 + (^{5350 × 2 × 8}/₁₀₀)

= $5350 + (^{10700 × 8}/₁₀₀)

= $5350 + (⁸⁵⁶⁰⁰/₁₀₀)

= $5350 + $856 = $6206

Thus, Amount (A) to be paid = $6206 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 $5350, the simple interest in 1 year

= ²/₁₀₀ × 5350

= ^{2 × 5350}/₁₀₀

= ¹⁰⁷⁰⁰/₁₀₀ = $107

Thus, simple interest for 1 year = $107

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $107 × 8 = $856

Thus, Simple Interest (SI) = $856

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5350 + $856

= $6206

Thus, Amount to be paid = $6206 Answer

Similar Questions

(1) How much loan did Nancy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7072.5 to clear it?

(2) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.

(3) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?

(4) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?

(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?

(6) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.

(7) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.

(8) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.

(10) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.