Simple Interest
Math MCQs

Question :    Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 8 years.

Correct Answer  $6262

Solution & Explanation

Solution

Given,

Principal (P) = $5050

Rate of Simple Interest (SI) = 3%

Time (t) = 8 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $5050 × 3% × 8

= $5050 ׳/₁₀₀ × 8

= ^{5050 × 3 × 8}/₁₀₀

= ^{15150 × 8}/₁₀₀

= ¹²¹²⁰⁰/₁₀₀

= $1212

Thus, Simple Interest = $1212

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 = $5050 + $1212

= $6262

Thus, Amount to be paid = $6262 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 = $5050

Rate of Simple Interest (SI) or (R) = 3%

And, Time (t) = 8 years

Thus, Amount (A)

= $5050 + ($5050 × 3% × 8)

= $5050 + ($5050 ׳/₁₀₀ × 8)

= $5050 + (^{5050 × 3 × 8}/₁₀₀)

= $5050 + (^{15150 × 8}/₁₀₀)

= $5050 + (¹²¹²⁰⁰/₁₀₀)

= $5050 + $1212 = $6262

Thus, Amount (A) to be paid = $6262 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = ³/₁₀₀

∴ For $5050, the simple interest in 1 year

= ³/₁₀₀ × 5050

= ^{3 × 5050}/₁₀₀

= ¹⁵¹⁵⁰/₁₀₀ = $151.5

Thus, simple interest for 1 year = $151.5

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $151.5 × 8 = $1212

Thus, Simple Interest (SI) = $1212

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5050 + $1212

= $6262

Thus, Amount to be paid = $6262 Answer

Similar Questions

(1) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 7 years.

(2) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.

(4) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.

(5) If Joshua paid $5684 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.

(7) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?

(8) If Lisa paid $4374 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.

(10) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.