Simple Interest
MCQs Math


Question:     Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 8 years.


Correct Answer  $7070

Solution And Explanation

Solution

Given,

Principal (P) = $5050

Rate of Simple Interest (SI) = 5%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5050 × 5% × 8

= $5050 ×5/100 × 8

= 5050 × 5 × 8/100

= 25250 × 8/100

= 202000/100

= $2020

Thus, Simple Interest = $2020

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 = $5050 + $2020

= $7070

Thus, Amount to be paid = $7070 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 = $5050

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 8 years

Thus, Amount (A)

= $5050 + ($5050 × 5% × 8)

= $5050 + ($5050 ×5/100 × 8)

= $5050 + (5050 × 5 × 8/100)

= $5050 + (25250 × 8/100)

= $5050 + (202000/100)

= $5050 + $2020 = $7070

Thus, Amount (A) to be paid = $7070 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = 5/100

∴ For $5050, the simple interest in 1 year

= 5/100 × 5050

= 5 × 5050/100

= 25250/100 = $252.5

Thus, simple interest for 1 year = $252.5

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $252.5 × 8 = $2020

Thus, Simple Interest (SI) = $2020

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5050 + $2020

= $7070

Thus, Amount to be paid = $7070 Answer


Similar Questions

(1) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.

(2) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?

(3) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?

(4) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?

(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?

(6) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.

(7) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.

(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 7% simple interest.

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


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