Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.

Correct Answer  $7140

Solution & Explanation

Solution

Given,

Principal (P) = $5950

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) = $5950 × 2% × 10

= $5950 ײ/₁₀₀ × 10

= ^{5950 × 2 × 10}/₁₀₀

= ^{11900 × 10}/₁₀₀

= ¹¹⁹⁰⁰⁰/₁₀₀

= $1190

Thus, Simple Interest = $1190

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 = $5950 + $1190

= $7140

Thus, Amount to be paid = $7140 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 = $5950

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

And, Time (t) = 10 years

Thus, Amount (A)

= $5950 + ($5950 × 2% × 10)

= $5950 + ($5950 ײ/₁₀₀ × 10)

= $5950 + (^{5950 × 2 × 10}/₁₀₀)

= $5950 + (^{11900 × 10}/₁₀₀)

= $5950 + (¹¹⁹⁰⁰⁰/₁₀₀)

= $5950 + $1190 = $7140

Thus, Amount (A) to be paid = $7140 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 $5950, the simple interest in 1 year

= ²/₁₀₀ × 5950

= ^{2 × 5950}/₁₀₀

= ¹¹⁹⁰⁰/₁₀₀ = $119

Thus, simple interest for 1 year = $119

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $119 × 10 = $1190

Thus, Simple Interest (SI) = $1190

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5950 + $1190

= $7140

Thus, Amount to be paid = $7140 Answer

Similar Questions

(1) Donald had to pay $4770 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.

(3) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.

(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?

(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 5% simple interest?

(7) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?

(8) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.

(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.

(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 5% simple interest?