Simple Interest
Math MCQs

Question :    Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.

Correct Answer  $7920

Solution & Explanation

Solution

Given,

Principal (P) = $6000

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) = $6000 × 4% × 8

= $6000 ×⁴/₁₀₀ × 8

= ^{6000 × 4 × 8}/₁₀₀

= ^{24000 × 8}/₁₀₀

= ¹⁹²⁰⁰⁰/₁₀₀

= $1920

Thus, Simple Interest = $1920

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 = $6000 + $1920

= $7920

Thus, Amount to be paid = $7920 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 = $6000

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

And, Time (t) = 8 years

Thus, Amount (A)

= $6000 + ($6000 × 4% × 8)

= $6000 + ($6000 ×⁴/₁₀₀ × 8)

= $6000 + (^{6000 × 4 × 8}/₁₀₀)

= $6000 + (^{24000 × 8}/₁₀₀)

= $6000 + (¹⁹²⁰⁰⁰/₁₀₀)

= $6000 + $1920 = $7920

Thus, Amount (A) to be paid = $7920 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 $6000, the simple interest in 1 year

= ⁴/₁₀₀ × 6000

= ^{4 × 6000}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀ = $240

Thus, simple interest for 1 year = $240

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $240 × 8 = $1920

Thus, Simple Interest (SI) = $1920

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $6000 + $1920

= $7920

Thus, Amount to be paid = $7920 Answer

Similar Questions

(1) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.

(4) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?

(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.

(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 4 years.

(7) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.

(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.

(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6854 to clear the loan, then find the time period of the loan.

(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.