Simple Interest
MCQs Math


Question:     Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 8 years.


Correct Answer  $6944

Solution And Explanation

Solution

Given,

Principal (P) = $5600

Rate of Simple Interest (SI) = 3%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 8

= $5600 ×3/100 × 8

= 5600 × 3 × 8/100

= 16800 × 8/100

= 134400/100

= $1344

Thus, Simple Interest = $1344

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 + $1344

= $6944

Thus, Amount to be paid = $6944 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) = 3%

And, Time (t) = 8 years

Thus, Amount (A)

= $5600 + ($5600 × 3% × 8)

= $5600 + ($5600 ×3/100 × 8)

= $5600 + (5600 × 3 × 8/100)

= $5600 + (16800 × 8/100)

= $5600 + (134400/100)

= $5600 + $1344 = $6944

Thus, Amount (A) to be paid = $6944 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = 3/100

∴ For $5600, the simple interest in 1 year

= 3/100 × 5600

= 3 × 5600/100

= 16800/100 = $168

Thus, simple interest for 1 year = $168

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $168 × 8 = $1344

Thus, Simple Interest (SI) = $1344

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $1344

= $6944

Thus, Amount to be paid = $6944 Answer


Similar Questions

(1) How much loan did Jessica borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6325 to clear it?

(2) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.

(4) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?

(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.

(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?

(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 8 years.

(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.

(9) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8428 to clear the loan, then find the time period of the loan.


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