Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?

Correct Answer  $4047

Solution & Explanation

Solution

Given,

Principal (P) = $3550

Rate of Simple Interest (SI) = 7%

Time (t) = 2 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) = $3550 × 7% × 2

= $3550 ×⁷/₁₀₀ × 2

= ^{3550 × 7 × 2}/₁₀₀

= ^{24850 × 2}/₁₀₀

= ⁴⁹⁷⁰⁰/₁₀₀

= $497

Thus, Simple Interest = $497

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 = $3550 + $497

= $4047

Thus, Amount to be paid = $4047 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 = $3550

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3550 + ($3550 × 7% × 2)

= $3550 + ($3550 ×⁷/₁₀₀ × 2)

= $3550 + (^{3550 × 7 × 2}/₁₀₀)

= $3550 + (^{24850 × 2}/₁₀₀)

= $3550 + (⁴⁹⁷⁰⁰/₁₀₀)

= $3550 + $497 = $4047

Thus, Amount (A) to be paid = $4047 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 $3550, the simple interest in 1 year

= ⁷/₁₀₀ × 3550

= ^{7 × 3550}/₁₀₀

= ²⁴⁸⁵⁰/₁₀₀ = $248.5

Thus, simple interest for 1 year = $248.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $248.5 × 2 = $497

Thus, Simple Interest (SI) = $497

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3550 + $497

= $4047

Thus, Amount to be paid = $4047 Answer

Similar Questions

(1) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.

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

(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 8% simple interest?

(4) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.

(5) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?

(6) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?

(7) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?

(8) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(9) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?

(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 8 years.