Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.

Correct Answer  $6720

Solution & Explanation

Solution

Given,

Principal (P) = $5600

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) = $5600 × 2% × 10

= $5600 ײ/₁₀₀ × 10

= ^{5600 × 2 × 10}/₁₀₀

= ^{11200 × 10}/₁₀₀

= ¹¹²⁰⁰⁰/₁₀₀

= $1120

Thus, Simple Interest = $1120

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 = $5600 + $1120

= $6720

Thus, Amount to be paid = $6720 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 = $5600

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 10 years

Thus, Amount (A)

= $5600 + ($5600 × 2% × 10)

= $5600 + ($5600 ײ/₁₀₀ × 10)

= $5600 + (^{5600 × 2 × 10}/₁₀₀)

= $5600 + (^{11200 × 10}/₁₀₀)

= $5600 + (¹¹²⁰⁰⁰/₁₀₀)

= $5600 + $1120 = $6720

Thus, Amount (A) to be paid = $6720 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 $5600, the simple interest in 1 year

= ²/₁₀₀ × 5600

= ^{2 × 5600}/₁₀₀

= ¹¹²⁰⁰/₁₀₀ = $112

Thus, simple interest for 1 year = $112

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $112 × 10 = $1120

Thus, Simple Interest (SI) = $1120

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $1120

= $6720

Thus, Amount to be paid = $6720 Answer

Similar Questions

(1) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?

(2) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.

(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.

(4) If Jessica paid $4350 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(5) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.

(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.

(7) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.

(9) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(10) How much loan did Lisa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6957.5 to clear it?