Simple Interest
MCQs Math


Question:     Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.


Correct Answer  $8268

Solution And Explanation

Solution

Given,

Principal (P) = $5300

Rate of Simple Interest (SI) = 7%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $5300 × 7% × 8

= $5300 ×7/100 × 8

= 5300 × 7 × 8/100

= 37100 × 8/100

= 296800/100

= $2968

Thus, Simple Interest = $2968

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 = $5300 + $2968

= $8268

Thus, Amount to be paid = $8268 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 = $5300

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 8 years

Thus, Amount (A)

= $5300 + ($5300 × 7% × 8)

= $5300 + ($5300 ×7/100 × 8)

= $5300 + (5300 × 7 × 8/100)

= $5300 + (37100 × 8/100)

= $5300 + (296800/100)

= $5300 + $2968 = $8268

Thus, Amount (A) to be paid = $8268 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = 7/100

∴ For $5300, the simple interest in 1 year

= 7/100 × 5300

= 7 × 5300/100

= 37100/100 = $371

Thus, simple interest for 1 year = $371

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $371 × 8 = $2968

Thus, Simple Interest (SI) = $2968

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $2968

= $8268

Thus, Amount to be paid = $8268 Answer


Similar Questions

(1) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.

(2) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.

(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.

(5) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(6) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 8 years.

(7) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.

(8) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.

(9) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.

(10) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.


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