Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.

Correct Answer  $7260

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 4% × 8

= $5500 ×⁴/₁₀₀ × 8

= ^{5500 × 4 × 8}/₁₀₀

= ^{22000 × 8}/₁₀₀

= ¹⁷⁶⁰⁰⁰/₁₀₀

= $1760

Thus, Simple Interest = $1760

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 = $5500 + $1760

= $7260

Thus, Amount to be paid = $7260 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 = $5500

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5500 + ($5500 × 4% × 8)

= $5500 + ($5500 ×⁴/₁₀₀ × 8)

= $5500 + (^{5500 × 4 × 8}/₁₀₀)

= $5500 + (^{22000 × 8}/₁₀₀)

= $5500 + (¹⁷⁶⁰⁰⁰/₁₀₀)

= $5500 + $1760 = $7260

Thus, Amount (A) to be paid = $7260 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 $5500, the simple interest in 1 year

= ⁴/₁₀₀ × 5500

= ^{4 × 5500}/₁₀₀

= ²²⁰⁰⁰/₁₀₀ = $220

Thus, simple interest for 1 year = $220

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $220 × 8 = $1760

Thus, Simple Interest (SI) = $1760

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $1760

= $7260

Thus, Amount to be paid = $7260 Answer

Similar Questions

(1) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?

(2) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(3) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?

(4) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(5) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.

(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 10% simple interest?

(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.

(8) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.

(9) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 4 years.

(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 7 years.