Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.

Correct Answer  $6820

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 3% × 8

= $5500 ׳/₁₀₀ × 8

= ^{5500 × 3 × 8}/₁₀₀

= ^{16500 × 8}/₁₀₀

= ¹³²⁰⁰⁰/₁₀₀

= $1320

Thus, Simple Interest = $1320

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 = $5500 + $1320

= $6820

Thus, Amount to be paid = $6820 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 = $5500

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5500 + ($5500 × 3% × 8)

= $5500 + ($5500 ׳/₁₀₀ × 8)

= $5500 + (^{5500 × 3 × 8}/₁₀₀)

= $5500 + (^{16500 × 8}/₁₀₀)

= $5500 + (¹³²⁰⁰⁰/₁₀₀)

= $5500 + $1320 = $6820

Thus, Amount (A) to be paid = $6820 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 $5500, the simple interest in 1 year

= ³/₁₀₀ × 5500

= ^{3 × 5500}/₁₀₀

= ¹⁶⁵⁰⁰/₁₀₀ = $165

Thus, simple interest for 1 year = $165

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $165 × 8 = $1320

Thus, Simple Interest (SI) = $1320

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $1320

= $6820

Thus, Amount to be paid = $6820 Answer

Similar Questions

(1) If Christopher paid $4480 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.

(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.

(4) Linda had to pay $3752 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?

(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.

(7) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?

(8) How much loan did Nancy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6765 to clear it?

(9) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?

(10) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?