Simple Interest
Math MCQs

Question :    Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.

Correct Answer  $6670

Solution & Explanation

Solution

Given,

Principal (P) = $5750

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) = $5750 × 2% × 8

= $5750 ײ/₁₀₀ × 8

= ^{5750 × 2 × 8}/₁₀₀

= ^{11500 × 8}/₁₀₀

= ⁹²⁰⁰⁰/₁₀₀

= $920

Thus, Simple Interest = $920

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 = $5750 + $920

= $6670

Thus, Amount to be paid = $6670 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 = $5750

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5750 + ($5750 × 2% × 8)

= $5750 + ($5750 ײ/₁₀₀ × 8)

= $5750 + (^{5750 × 2 × 8}/₁₀₀)

= $5750 + (^{11500 × 8}/₁₀₀)

= $5750 + (⁹²⁰⁰⁰/₁₀₀)

= $5750 + $920 = $6670

Thus, Amount (A) to be paid = $6670 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 $5750, the simple interest in 1 year

= ²/₁₀₀ × 5750

= ^{2 × 5750}/₁₀₀

= ¹¹⁵⁰⁰/₁₀₀ = $115

Thus, simple interest for 1 year = $115

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $115 × 8 = $920

Thus, Simple Interest (SI) = $920

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5750 + $920

= $6670

Thus, Amount to be paid = $6670 Answer

Similar Questions

(1) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.

(3) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.

(4) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?

(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.

(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.

(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.

(8) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.

(10) How much loan did Barbara borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6105 to clear it?