Simple Interest
Math MCQs

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

Correct Answer  $8610

Solution & Explanation

Solution

Given,

Principal (P) = $5250

Rate of Simple Interest (SI) = 8%

Time (t) = 8 years

Thus, Amount (A) = ?

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

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

= $5250 ×⁸/₁₀₀ × 8

= ^{5250 × 8 × 8}/₁₀₀

= ^{42000 × 8}/₁₀₀

= ³³⁶⁰⁰⁰/₁₀₀

= $3360

Thus, Simple Interest = $3360

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 + $3360

= $8610

Thus, Amount to be paid = $8610 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) = 8%

And, Time (t) = 8 years

Thus, Amount (A)

= $5250 + ($5250 × 8% × 8)

= $5250 + ($5250 ×⁸/₁₀₀ × 8)

= $5250 + (^{5250 × 8 × 8}/₁₀₀)

= $5250 + (^{42000 × 8}/₁₀₀)

= $5250 + (³³⁶⁰⁰⁰/₁₀₀)

= $5250 + $3360 = $8610

Thus, Amount (A) to be paid = $8610 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $5250, the simple interest in 1 year

= ⁸/₁₀₀ × 5250

= ^{8 × 5250}/₁₀₀

= ⁴²⁰⁰⁰/₁₀₀ = $420

Thus, simple interest for 1 year = $420

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $420 × 8 = $3360

Thus, Simple Interest (SI) = $3360

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5250 + $3360

= $8610

Thus, Amount to be paid = $8610 Answer

Similar Questions

(1) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.

(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.

(4) If Kenneth paid $5800 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

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

(6) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.

(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?

(8) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7072 to clear the loan, then find the time period of the loan.

(10) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.