Simple Interest
Math MCQs

Question :    Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.

Correct Answer  $6438

Solution & Explanation

Solution

Given,

Principal (P) = $5550

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) = $5550 × 2% × 8

= $5550 ײ/₁₀₀ × 8

= ^{5550 × 2 × 8}/₁₀₀

= ^{11100 × 8}/₁₀₀

= ⁸⁸⁸⁰⁰/₁₀₀

= $888

Thus, Simple Interest = $888

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 = $5550 + $888

= $6438

Thus, Amount to be paid = $6438 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 = $5550

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5550 + ($5550 × 2% × 8)

= $5550 + ($5550 ײ/₁₀₀ × 8)

= $5550 + (^{5550 × 2 × 8}/₁₀₀)

= $5550 + (^{11100 × 8}/₁₀₀)

= $5550 + (⁸⁸⁸⁰⁰/₁₀₀)

= $5550 + $888 = $6438

Thus, Amount (A) to be paid = $6438 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 $5550, the simple interest in 1 year

= ²/₁₀₀ × 5550

= ^{2 × 5550}/₁₀₀

= ¹¹¹⁰⁰/₁₀₀ = $111

Thus, simple interest for 1 year = $111

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $111 × 8 = $888

Thus, Simple Interest (SI) = $888

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5550 + $888

= $6438

Thus, Amount to be paid = $6438 Answer

Similar Questions

(1) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?

(2) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?

(3) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(4) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.

(6) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.

(7) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(8) Jennifer had to pay $3445 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(9) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.

(10) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?