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) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8791 to clear the loan, then find the time period of the loan.

(2) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.

(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 10% simple interest.

(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?

(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.

(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.

(9) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.