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) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.

(3) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 9% simple interest.

(5) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?

(6) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(7) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.

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

(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?