Simple Interest
Math MCQs

Question :    Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.

Correct Answer  $6612

Solution & Explanation

Solution

Given,

Principal (P) = $5700

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) = $5700 × 2% × 8

= $5700 ײ/₁₀₀ × 8

= ^{5700 × 2 × 8}/₁₀₀

= ^{11400 × 8}/₁₀₀

= ⁹¹²⁰⁰/₁₀₀

= $912

Thus, Simple Interest = $912

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 = $5700 + $912

= $6612

Thus, Amount to be paid = $6612 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 = $5700

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5700 + ($5700 × 2% × 8)

= $5700 + ($5700 ײ/₁₀₀ × 8)

= $5700 + (^{5700 × 2 × 8}/₁₀₀)

= $5700 + (^{11400 × 8}/₁₀₀)

= $5700 + (⁹¹²⁰⁰/₁₀₀)

= $5700 + $912 = $6612

Thus, Amount (A) to be paid = $6612 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 $5700, the simple interest in 1 year

= ²/₁₀₀ × 5700

= ^{2 × 5700}/₁₀₀

= ¹¹⁴⁰⁰/₁₀₀ = $114

Thus, simple interest for 1 year = $114

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $114 × 8 = $912

Thus, Simple Interest (SI) = $912

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5700 + $912

= $6612

Thus, Amount to be paid = $6612 Answer

Similar Questions

(1) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

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

(3) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.

(5) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13800 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 4 years.

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

(8) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.

(9) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(10) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.