Simple Interest
Math MCQs

Question :    Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 8 years.

Correct Answer  $7192

Solution & Explanation

Solution

Given,

Principal (P) = $5800

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) = $5800 × 3% × 8

= $5800 ׳/₁₀₀ × 8

= ^{5800 × 3 × 8}/₁₀₀

= ^{17400 × 8}/₁₀₀

= ¹³⁹²⁰⁰/₁₀₀

= $1392

Thus, Simple Interest = $1392

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 = $5800 + $1392

= $7192

Thus, Amount to be paid = $7192 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 = $5800

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5800 + ($5800 × 3% × 8)

= $5800 + ($5800 ׳/₁₀₀ × 8)

= $5800 + (^{5800 × 3 × 8}/₁₀₀)

= $5800 + (^{17400 × 8}/₁₀₀)

= $5800 + (¹³⁹²⁰⁰/₁₀₀)

= $5800 + $1392 = $7192

Thus, Amount (A) to be paid = $7192 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 $5800, the simple interest in 1 year

= ³/₁₀₀ × 5800

= ^{3 × 5800}/₁₀₀

= ¹⁷⁴⁰⁰/₁₀₀ = $174

Thus, simple interest for 1 year = $174

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $174 × 8 = $1392

Thus, Simple Interest (SI) = $1392

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5800 + $1392

= $7192

Thus, Amount to be paid = $7192 Answer

Similar Questions

(1) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?

(2) How much loan did Joseph borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6270 to clear it?

(3) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.

(4) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.

(5) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?

(7) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.

(8) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.

(9) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?

(10) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.