Simple Interest
Math MCQs

Question :    Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.

Correct Answer  $6996

Solution & Explanation

Solution

Given,

Principal (P) = $5300

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) = $5300 × 4% × 8

= $5300 ×⁴/₁₀₀ × 8

= ^{5300 × 4 × 8}/₁₀₀

= ^{21200 × 8}/₁₀₀

= ¹⁶⁹⁶⁰⁰/₁₀₀

= $1696

Thus, Simple Interest = $1696

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 = $5300 + $1696

= $6996

Thus, Amount to be paid = $6996 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 = $5300

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5300 + ($5300 × 4% × 8)

= $5300 + ($5300 ×⁴/₁₀₀ × 8)

= $5300 + (^{5300 × 4 × 8}/₁₀₀)

= $5300 + (^{21200 × 8}/₁₀₀)

= $5300 + (¹⁶⁹⁶⁰⁰/₁₀₀)

= $5300 + $1696 = $6996

Thus, Amount (A) to be paid = $6996 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 $5300, the simple interest in 1 year

= ⁴/₁₀₀ × 5300

= ^{4 × 5300}/₁₀₀

= ²¹²⁰⁰/₁₀₀ = $212

Thus, simple interest for 1 year = $212

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $212 × 8 = $1696

Thus, Simple Interest (SI) = $1696

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $1696

= $6996

Thus, Amount to be paid = $6996 Answer

Similar Questions

(1) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?

(2) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.

(3) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.

(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 4% simple interest?

(6) Susan had to pay $3869 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.

(8) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.

(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 7 years.

(10) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 3 years.