Simple Interest
MCQs Math


Question:     Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 8 years.


Correct Answer  $7392

Solution And Explanation

Solution

Given,

Principal (P) = $5600

Rate of Simple Interest (SI) = 4%

Time (t) = 8 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% × 8

= $5600 ×4/100 × 8

= 5600 × 4 × 8/100

= 22400 × 8/100

= 179200/100

= $1792

Thus, Simple Interest = $1792

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 + $1792

= $7392

Thus, Amount to be paid = $7392 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) = 8 years

Thus, Amount (A)

= $5600 + ($5600 × 4% × 8)

= $5600 + ($5600 ×4/100 × 8)

= $5600 + (5600 × 4 × 8/100)

= $5600 + (22400 × 8/100)

= $5600 + (179200/100)

= $5600 + $1792 = $7392

Thus, Amount (A) to be paid = $7392 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 8 years

= Simple interest for 1 year × 8

= $224 × 8 = $1792

Thus, Simple Interest (SI) = $1792

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $1792

= $7392

Thus, Amount to be paid = $7392 Answer


Similar Questions

(1) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.

(2) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?

(4) If Susan paid $3942 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 after 10 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.

(6) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.

(7) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.

(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?

(10) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.


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