Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 8% simple interest.

Correct Answer  $9720

Solution & Explanation

Solution

Given,

Principal (P) = $5400

Rate of Simple Interest (SI) = 8%

Time (t) = 10 years

Thus, Amount (A) = ?

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

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

= $5400 ×⁸/₁₀₀ × 10

= ^{5400 × 8 × 10}/₁₀₀

= ^{43200 × 10}/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) = 8%

And, Time (t) = 10 years

Thus, Amount (A)

= $5400 + ($5400 × 8% × 10)

= $5400 + ($5400 ×⁸/₁₀₀ × 10)

= $5400 + (^{5400 × 8 × 10}/₁₀₀)

= $5400 + (^{43200 × 10}/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 = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $5400, the simple interest in 1 year

= ⁸/₁₀₀ × 5400

= ^{8 × 5400}/₁₀₀

= ⁴³²⁰⁰/₁₀₀ = $432

Thus, simple interest for 1 year = $432

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $432 × 10 = $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) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?

(2) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.

(4) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.

(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?

(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.

(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 8 years.

(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 3 years.

(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?