Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 8 years.

Correct Answer  $9020

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 8% × 8

= $5500 ×⁸/₁₀₀ × 8

= ^{5500 × 8 × 8}/₁₀₀

= ^{44000 × 8}/₁₀₀

= ³⁵²⁰⁰⁰/₁₀₀

= $3520

Thus, Simple Interest = $3520

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 = $5500 + $3520

= $9020

Thus, Amount to be paid = $9020 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 = $5500

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

And, Time (t) = 8 years

Thus, Amount (A)

= $5500 + ($5500 × 8% × 8)

= $5500 + ($5500 ×⁸/₁₀₀ × 8)

= $5500 + (^{5500 × 8 × 8}/₁₀₀)

= $5500 + (^{44000 × 8}/₁₀₀)

= $5500 + (³⁵²⁰⁰⁰/₁₀₀)

= $5500 + $3520 = $9020

Thus, Amount (A) to be paid = $9020 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 $5500, the simple interest in 1 year

= ⁸/₁₀₀ × 5500

= ^{8 × 5500}/₁₀₀

= ⁴⁴⁰⁰⁰/₁₀₀ = $440

Thus, simple interest for 1 year = $440

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $440 × 8 = $3520

Thus, Simple Interest (SI) = $3520

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $3520

= $9020

Thus, Amount to be paid = $9020 Answer

Similar Questions

(1) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.

(2) In how much time a principal of $3100 will amount to $3596 at a simple interest of 4% per annum?

(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.

(4) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.

(5) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(6) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $13000 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.

(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.

(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.

(10) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?