Simple Interest
Math MCQs

Question :    Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.

Correct Answer  $6666

Solution & Explanation

Solution

Given,

Principal (P) = $5050

Rate of Simple Interest (SI) = 4%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 8

= $5050 ×⁴/₁₀₀ × 8

= ^{5050 × 4 × 8}/₁₀₀

= ^{20200 × 8}/₁₀₀

= ¹⁶¹⁶⁰⁰/₁₀₀

= $1616

Thus, Simple Interest = $1616

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 + $1616

= $6666

Thus, Amount to be paid = $6666 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) = 4%

And, Time (t) = 8 years

Thus, Amount (A)

= $5050 + ($5050 × 4% × 8)

= $5050 + ($5050 ×⁴/₁₀₀ × 8)

= $5050 + (^{5050 × 4 × 8}/₁₀₀)

= $5050 + (^{20200 × 8}/₁₀₀)

= $5050 + (¹⁶¹⁶⁰⁰/₁₀₀)

= $5050 + $1616 = $6666

Thus, Amount (A) to be paid = $6666 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $5050, the simple interest in 1 year

= ⁴/₁₀₀ × 5050

= ^{4 × 5050}/₁₀₀

= ²⁰²⁰⁰/₁₀₀ = $202

Thus, simple interest for 1 year = $202

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $202 × 8 = $1616

Thus, Simple Interest (SI) = $1616

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5050 + $1616

= $6666

Thus, Amount to be paid = $6666 Answer

Similar Questions

(1) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.

(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10281 to clear the loan, then find the time period of the loan.

(3) 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?

(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.

(5) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(6) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?

(7) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $11480 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 7 years.

(9) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.

(10) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.