Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.

Correct Answer  $7128

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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) = $5400 × 4% × 8

= $5400 ×⁴/₁₀₀ × 8

= ^{5400 × 4 × 8}/₁₀₀

= ^{21600 × 8}/₁₀₀

= ¹⁷²⁸⁰⁰/₁₀₀

= $1728

Thus, Simple Interest = $1728

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 = $5400 + $1728

= $7128

Thus, Amount to be paid = $7128 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 = $5400

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5400 + ($5400 × 4% × 8)

= $5400 + ($5400 ×⁴/₁₀₀ × 8)

= $5400 + (^{5400 × 4 × 8}/₁₀₀)

= $5400 + (^{21600 × 8}/₁₀₀)

= $5400 + (¹⁷²⁸⁰⁰/₁₀₀)

= $5400 + $1728 = $7128

Thus, Amount (A) to be paid = $7128 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 $5400, the simple interest in 1 year

= ⁴/₁₀₀ × 5400

= ^{4 × 5400}/₁₀₀

= ²¹⁶⁰⁰/₁₀₀ = $216

Thus, simple interest for 1 year = $216

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $216 × 8 = $1728

Thus, Simple Interest (SI) = $1728

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $1728

= $7128

Thus, Amount to be paid = $7128 Answer

Similar Questions

(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 3 years.

(2) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?

(3) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.

(4) In how much time a principal of $3000 will amount to $3480 at a simple interest of 4% per annum?

(5) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.

(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9348 to clear the loan, then find the time period of the loan.

(7) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?

(8) Barbara had to pay $3763 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(9) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Robert borrowed a sum of $3100 at 6% simple interest for 3 years.