Simple Interest
Math MCQs

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

Correct Answer  $6864

Solution & Explanation

Solution

Given,

Principal (P) = $5200

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) = $5200 × 4% × 8

= $5200 ×⁴/₁₀₀ × 8

= ^{5200 × 4 × 8}/₁₀₀

= ^{20800 × 8}/₁₀₀

= ¹⁶⁶⁴⁰⁰/₁₀₀

= $1664

Thus, Simple Interest = $1664

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 = $5200 + $1664

= $6864

Thus, Amount to be paid = $6864 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 = $5200

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 8 years

Thus, Amount (A)

= $5200 + ($5200 × 4% × 8)

= $5200 + ($5200 ×⁴/₁₀₀ × 8)

= $5200 + (^{5200 × 4 × 8}/₁₀₀)

= $5200 + (^{20800 × 8}/₁₀₀)

= $5200 + (¹⁶⁶⁴⁰⁰/₁₀₀)

= $5200 + $1664 = $6864

Thus, Amount (A) to be paid = $6864 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 $5200, the simple interest in 1 year

= ⁴/₁₀₀ × 5200

= ^{4 × 5200}/₁₀₀

= ²⁰⁸⁰⁰/₁₀₀ = $208

Thus, simple interest for 1 year = $208

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $208 × 8 = $1664

Thus, Simple Interest (SI) = $1664

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5200 + $1664

= $6864

Thus, Amount to be paid = $6864 Answer

Similar Questions

(1) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?

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

(3) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(4) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.

(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.

(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 9% simple interest?

(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.

(9) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 7 years.

(10) Emily had to pay $5462.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.