Simple Interest
MCQs Math


Question:     Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.


Correct Answer  $7490

Solution And Explanation

Solution

Given,

Principal (P) = $5350

Rate of Simple Interest (SI) = 4%

Time (t) = 10 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) = $5350 × 4% × 10

= $5350 ×4/100 × 10

= 5350 × 4 × 10/100

= 21400 × 10/100

= 214000/100

= $2140

Thus, Simple Interest = $2140

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 = $5350 + $2140

= $7490

Thus, Amount to be paid = $7490 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 = $5350

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 10 years

Thus, Amount (A)

= $5350 + ($5350 × 4% × 10)

= $5350 + ($5350 ×4/100 × 10)

= $5350 + (5350 × 4 × 10/100)

= $5350 + (21400 × 10/100)

= $5350 + (214000/100)

= $5350 + $2140 = $7490

Thus, Amount (A) to be paid = $7490 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 $5350, the simple interest in 1 year

= 4/100 × 5350

= 4 × 5350/100

= 21400/100 = $214

Thus, simple interest for 1 year = $214

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $214 × 10 = $2140

Thus, Simple Interest (SI) = $2140

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5350 + $2140

= $7490

Thus, Amount to be paid = $7490 Answer


Similar Questions

(1) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 8 years.

(3) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?

(4) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.

(5) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?

(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?

(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.

(8) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?

(9) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(10) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?


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