Simple Interest
Math MCQs

Question :    Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 8 years.

Correct Answer  $7350

Solution & Explanation

Solution

Given,

Principal (P) = $5250

Rate of Simple Interest (SI) = 5%

Time (t) = 8 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5250 × 5% × 8

= $5250 ×⁵/₁₀₀ × 8

= ^{5250 × 5 × 8}/₁₀₀

= ^{26250 × 8}/₁₀₀

= ²¹⁰⁰⁰⁰/₁₀₀

= $2100

Thus, Simple Interest = $2100

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 = $5250 + $2100

= $7350

Thus, Amount to be paid = $7350 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 = $5250

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 8 years

Thus, Amount (A)

= $5250 + ($5250 × 5% × 8)

= $5250 + ($5250 ×⁵/₁₀₀ × 8)

= $5250 + (^{5250 × 5 × 8}/₁₀₀)

= $5250 + (^{26250 × 8}/₁₀₀)

= $5250 + (²¹⁰⁰⁰⁰/₁₀₀)

= $5250 + $2100 = $7350

Thus, Amount (A) to be paid = $7350 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $5250, the simple interest in 1 year

= ⁵/₁₀₀ × 5250

= ^{5 × 5250}/₁₀₀

= ²⁶²⁵⁰/₁₀₀ = $262.5

Thus, simple interest for 1 year = $262.5

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $262.5 × 8 = $2100

Thus, Simple Interest (SI) = $2100

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5250 + $2100

= $7350

Thus, Amount to be paid = $7350 Answer

Similar Questions

(1) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?

(2) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?

(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.

(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?

(5) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 3 years.

(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.

(7) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?

(8) If Sarah paid $4466 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(9) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(10) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?