Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.

Correct Answer  $6600

Solution & Explanation

Solution

Given,

Principal (P) = $5500

Rate of Simple Interest (SI) = 2%

Time (t) = 10 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 10

= $5500 ײ/₁₀₀ × 10

= ^{5500 × 2 × 10}/₁₀₀

= ^{11000 × 10}/₁₀₀

= ¹¹⁰⁰⁰⁰/₁₀₀

= $1100

Thus, Simple Interest = $1100

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 + $1100

= $6600

Thus, Amount to be paid = $6600 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) = 2%

And, Time (t) = 10 years

Thus, Amount (A)

= $5500 + ($5500 × 2% × 10)

= $5500 + ($5500 ײ/₁₀₀ × 10)

= $5500 + (^{5500 × 2 × 10}/₁₀₀)

= $5500 + (^{11000 × 10}/₁₀₀)

= $5500 + (¹¹⁰⁰⁰⁰/₁₀₀)

= $5500 + $1100 = $6600

Thus, Amount (A) to be paid = $6600 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $5500, the simple interest in 1 year

= ²/₁₀₀ × 5500

= ^{2 × 5500}/₁₀₀

= ¹¹⁰⁰⁰/₁₀₀ = $110

Thus, simple interest for 1 year = $110

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $110 × 10 = $1100

Thus, Simple Interest (SI) = $1100

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $1100

= $6600

Thus, Amount to be paid = $6600 Answer

Similar Questions

(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.

(2) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 3 years.

(3) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?

(4) How much loan did Ashley borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7532.5 to clear it?

(5) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.

(6) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.

(8) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?

(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?

(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?