Simple Interest
Math MCQs

Question :  ( 1 of 10 )  Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.

Correct Answer  $8600

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (SI) = 9%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $5000 × 9% × 8

= $5000 ×⁹/₁₀₀ × 8

= ^{5000 × 9 × 8}/₁₀₀

= ^{45000 × 8}/₁₀₀

= ³⁶⁰⁰⁰⁰/₁₀₀

= $3600

Thus, Simple Interest = $3600

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 = $5000 + $3600

= $8600

Thus, Amount to be paid = $8600 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 = $5000

Rate of Simple Interest (SI) or (R) = 9%

And, Time (t) = 8 years

Thus, Amount (A)

= $5000 + ($5000 × 9% × 8)

= $5000 + ($5000 ×⁹/₁₀₀ × 8)

= $5000 + (^{5000 × 9 × 8}/₁₀₀)

= $5000 + (^{45000 × 8}/₁₀₀)

= $5000 + (³⁶⁰⁰⁰⁰/₁₀₀)

= $5000 + $3600 = $8600

Thus, Amount (A) to be paid = $8600 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 9%

This, means, $9 per $100 per year

∵ For $100, the simple interest for 1 year = $9

∴ For $1, the simple interest for 1 year = ⁹/₁₀₀

∴ For $5000, the simple interest in 1 year

= ⁹/₁₀₀ × 5000

= ^{9 × 5000}/₁₀₀

= ⁴⁵⁰⁰⁰/₁₀₀ = $450

Thus, simple interest for 1 year = $450

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $450 × 8 = $3600

Thus, Simple Interest (SI) = $3600

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5000 + $3600

= $8600

Thus, Amount to be paid = $8600 Answer

Similar Questions

(1) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?

(2) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.

(3) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.

(4) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.

(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.

(7) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.

(8) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.

(9) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?

(10) Steven had to pay $5014 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.