Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 8 years.

Correct Answer  $8856

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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) = $5400 × 8% × 8

= $5400 ×⁸/₁₀₀ × 8

= ^{5400 × 8 × 8}/₁₀₀

= ^{43200 × 8}/₁₀₀

= ³⁴⁵⁶⁰⁰/₁₀₀

= $3456

Thus, Simple Interest = $3456

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 = $5400 + $3456

= $8856

Thus, Amount to be paid = $8856 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 = $5400

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 8 years

Thus, Amount (A)

= $5400 + ($5400 × 8% × 8)

= $5400 + ($5400 ×⁸/₁₀₀ × 8)

= $5400 + (^{5400 × 8 × 8}/₁₀₀)

= $5400 + (^{43200 × 8}/₁₀₀)

= $5400 + (³⁴⁵⁶⁰⁰/₁₀₀)

= $5400 + $3456 = $8856

Thus, Amount (A) to be paid = $8856 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 $5400, the simple interest in 1 year

= ⁸/₁₀₀ × 5400

= ^{8 × 5400}/₁₀₀

= ⁴³²⁰⁰/₁₀₀ = $432

Thus, simple interest for 1 year = $432

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $432 × 8 = $3456

Thus, Simple Interest (SI) = $3456

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $3456

= $8856

Thus, Amount to be paid = $8856 Answer

Similar Questions

(1) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 10% simple interest.

(2) If Donna paid $5626 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(3) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(4) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.

(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.

(6) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.

(8) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.

(9) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?

(10) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.