Simple Interest
MCQs Math


Question:     Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.


Correct Answer  $6600

Solution And Explanation

Solution

Given,

Principal (P) = $5500

Rate of Simple Interest (SI) = 2%

Time (t) = 10 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 10

= $5500 ×2/100 × 10

= 5500 × 2 × 10/100

= 11000 × 10/100

= 110000/100

= $1100

Thus, Simple Interest = $1100

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 + $1100

= $6600

Thus, Amount to be paid = $6600 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) = 2%

And, Time (t) = 10 years

Thus, Amount (A)

= $5500 + ($5500 × 2% × 10)

= $5500 + ($5500 ×2/100 × 10)

= $5500 + (5500 × 2 × 10/100)

= $5500 + (11000 × 10/100)

= $5500 + (110000/100)

= $5500 + $1100 = $6600

Thus, Amount (A) to be paid = $6600 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = 2/100

∴ For $5500, the simple interest in 1 year

= 2/100 × 5500

= 2 × 5500/100

= 11000/100 = $110

Thus, simple interest for 1 year = $110

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $110 × 10 = $1100

Thus, Simple Interest (SI) = $1100

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $1100

= $6600

Thus, Amount to be paid = $6600 Answer


Similar Questions

(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 7 years.

(2) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.

(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?

(5) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.

(6) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.

(8) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?

(9) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 4 years.


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