Simple Interest
Math MCQs

Question :    Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.

Correct Answer  $7788

Solution & Explanation

Solution

Given,

Principal (P) = $5900

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) = $5900 × 4% × 8

= $5900 ×⁴/₁₀₀ × 8

= ^{5900 × 4 × 8}/₁₀₀

= ^{23600 × 8}/₁₀₀

= ¹⁸⁸⁸⁰⁰/₁₀₀

= $1888

Thus, Simple Interest = $1888

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 = $5900 + $1888

= $7788

Thus, Amount to be paid = $7788 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 = $5900

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5900 + ($5900 × 4% × 8)

= $5900 + ($5900 ×⁴/₁₀₀ × 8)

= $5900 + (^{5900 × 4 × 8}/₁₀₀)

= $5900 + (^{23600 × 8}/₁₀₀)

= $5900 + (¹⁸⁸⁸⁰⁰/₁₀₀)

= $5900 + $1888 = $7788

Thus, Amount (A) to be paid = $7788 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 $5900, the simple interest in 1 year

= ⁴/₁₀₀ × 5900

= ^{4 × 5900}/₁₀₀

= ²³⁶⁰⁰/₁₀₀ = $236

Thus, simple interest for 1 year = $236

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $236 × 8 = $1888

Thus, Simple Interest (SI) = $1888

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5900 + $1888

= $7788

Thus, Amount to be paid = $7788 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.

(2) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?

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

(4) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.

(5) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?

(7) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.

(9) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?

(10) If Matthew paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.