Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.

Correct Answer  $9720

Solution & Explanation

Solution

Given,

Principal (P) = $5400

Rate of Simple Interest (SI) = 10%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 8

= $5400 ×¹⁰/₁₀₀ × 8

= ^{5400 × 10 × 8}/₁₀₀

= ^{54000 × 8}/₁₀₀

= ⁴³²⁰⁰⁰/₁₀₀

= $4320

Thus, Simple Interest = $4320

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 + $4320

= $9720

Thus, Amount to be paid = $9720 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) = 10%

And, Time (t) = 8 years

Thus, Amount (A)

= $5400 + ($5400 × 10% × 8)

= $5400 + ($5400 ×¹⁰/₁₀₀ × 8)

= $5400 + (^{5400 × 10 × 8}/₁₀₀)

= $5400 + (^{54000 × 8}/₁₀₀)

= $5400 + (⁴³²⁰⁰⁰/₁₀₀)

= $5400 + $4320 = $9720

Thus, Amount (A) to be paid = $9720 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 10%

This, means, $10 per $100 per year

∵ For $100, the simple interest for 1 year = $10

∴ For $1, the simple interest for 1 year = ¹⁰/₁₀₀

∴ For $5400, the simple interest in 1 year

= ¹⁰/₁₀₀ × 5400

= ^{10 × 5400}/₁₀₀

= ⁵⁴⁰⁰⁰/₁₀₀ = $540

Thus, simple interest for 1 year = $540

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $540 × 8 = $4320

Thus, Simple Interest (SI) = $4320

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $4320

= $9720

Thus, Amount to be paid = $9720 Answer

Similar Questions

(1) 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?

(2) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.

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

(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.

(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.

(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.

(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 7 years.

(9) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?

(10) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.