Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.

Correct Answer  $7840

Solution & Explanation

Solution

Given,

Principal (P) = $5600

Rate of Simple Interest (SI) = 4%

Time (t) = 10 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 10

= $5600 ×⁴/₁₀₀ × 10

= ^{5600 × 4 × 10}/₁₀₀

= ^{22400 × 10}/₁₀₀

= ²²⁴⁰⁰⁰/₁₀₀

= $2240

Thus, Simple Interest = $2240

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 + $2240

= $7840

Thus, Amount to be paid = $7840 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) = 4%

And, Time (t) = 10 years

Thus, Amount (A)

= $5600 + ($5600 × 4% × 10)

= $5600 + ($5600 ×⁴/₁₀₀ × 10)

= $5600 + (^{5600 × 4 × 10}/₁₀₀)

= $5600 + (^{22400 × 10}/₁₀₀)

= $5600 + (²²⁴⁰⁰⁰/₁₀₀)

= $5600 + $2240 = $7840

Thus, Amount (A) to be paid = $7840 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $5600, the simple interest in 1 year

= ⁴/₁₀₀ × 5600

= ^{4 × 5600}/₁₀₀

= ²²⁴⁰⁰/₁₀₀ = $224

Thus, simple interest for 1 year = $224

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $224 × 10 = $2240

Thus, Simple Interest (SI) = $2240

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $2240

= $7840

Thus, Amount to be paid = $7840 Answer

Similar Questions

(1) In how much time a principal of $3000 will amount to $3450 at a simple interest of 3% per annum?

(2) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?

(4) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.

(5) How much loan did Daniel borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7625 to clear it?

(6) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.

(7) What amount does James have to pay after 5 years if he takes a loan of $3000 at 8% simple interest?

(8) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.

(9) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8700 to clear it?