Simple Interest
Math MCQs

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

Correct Answer  $6902

Solution & Explanation

Solution

Given,

Principal (P) = $5950

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) = $5950 × 2% × 8

= $5950 ײ/₁₀₀ × 8

= ^{5950 × 2 × 8}/₁₀₀

= ^{11900 × 8}/₁₀₀

= ⁹⁵²⁰⁰/₁₀₀

= $952

Thus, Simple Interest = $952

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 = $5950 + $952

= $6902

Thus, Amount to be paid = $6902 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 = $5950

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5950 + ($5950 × 2% × 8)

= $5950 + ($5950 ײ/₁₀₀ × 8)

= $5950 + (^{5950 × 2 × 8}/₁₀₀)

= $5950 + (^{11900 × 8}/₁₀₀)

= $5950 + (⁹⁵²⁰⁰/₁₀₀)

= $5950 + $952 = $6902

Thus, Amount (A) to be paid = $6902 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 $5950, the simple interest in 1 year

= ²/₁₀₀ × 5950

= ^{2 × 5950}/₁₀₀

= ¹¹⁹⁰⁰/₁₀₀ = $119

Thus, simple interest for 1 year = $119

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $119 × 8 = $952

Thus, Simple Interest (SI) = $952

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5950 + $952

= $6902

Thus, Amount to be paid = $6902 Answer

Similar Questions

(1) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?

(2) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?

(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.

(4) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

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

(6) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.

(7) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?

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

(9) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.

(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?