Simple Interest
MCQs Math


Question:     Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.


Correct Answer  $9900

Solution And Explanation

Solution

Given,

Principal (P) = $5500

Rate of Simple Interest (SI) = 10%

Time (t) = 8 years

Thus, Amount (A) = ?

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

Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $5500 × 10% × 8

= $5500 ×10/100 × 8

= 5500 × 10 × 8/100

= 55000 × 8/100

= 440000/100

= $4400

Thus, Simple Interest = $4400

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 = $5500 + $4400

= $9900

Thus, Amount to be paid = $9900 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 = $5500

Rate of Simple Interest (SI) or (R) = 10%

And, Time (t) = 8 years

Thus, Amount (A)

= $5500 + ($5500 × 10% × 8)

= $5500 + ($5500 ×10/100 × 8)

= $5500 + (5500 × 10 × 8/100)

= $5500 + (55000 × 8/100)

= $5500 + (440000/100)

= $5500 + $4400 = $9900

Thus, Amount (A) to be paid = $9900 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 10%

This, means, $10 per $100 per year

∵ For $100, the simple interest for 1 year = $10

∴ For $1, the simple interest for 1 year = 10/100

∴ For $5500, the simple interest in 1 year

= 10/100 × 5500

= 10 × 5500/100

= 55000/100 = $550

Thus, simple interest for 1 year = $550

Therefore, simple interest for 8 years

= Simple interest for 1 year × 8

= $550 × 8 = $4400

Thus, Simple Interest (SI) = $4400

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $4400

= $9900

Thus, Amount to be paid = $9900 Answer


Similar Questions

(1) How much loan did Nancy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6765 to clear it?

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.

(3) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.

(4) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.

(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 4 years.

(7) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $7992 to clear the loan, then find the time period of the loan.

(8) If Lisa paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?

(10) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.


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