Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 7% simple interest?

Correct Answer  $4275

Solution & Explanation

Solution

Given,

Principal (P) = $3750

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) = $3750 × 7% × 2

= $3750 ×⁷/₁₀₀ × 2

= ^{3750 × 7 × 2}/₁₀₀

= ^{26250 × 2}/₁₀₀

= ⁵²⁵⁰⁰/₁₀₀

= $525

Thus, Simple Interest = $525

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 = $3750 + $525

= $4275

Thus, Amount to be paid = $4275 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 = $3750

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3750 + ($3750 × 7% × 2)

= $3750 + ($3750 ×⁷/₁₀₀ × 2)

= $3750 + (^{3750 × 7 × 2}/₁₀₀)

= $3750 + (^{26250 × 2}/₁₀₀)

= $3750 + (⁵²⁵⁰⁰/₁₀₀)

= $3750 + $525 = $4275

Thus, Amount (A) to be paid = $4275 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 $3750, the simple interest in 1 year

= ⁷/₁₀₀ × 3750

= ^{7 × 3750}/₁₀₀

= ²⁶²⁵⁰/₁₀₀ = $262.5

Thus, simple interest for 1 year = $262.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $262.5 × 2 = $525

Thus, Simple Interest (SI) = $525

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3750 + $525

= $4275

Thus, Amount to be paid = $4275 Answer

Similar Questions

(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 3 years.

(2) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.

(3) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?

(4) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.

(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.

(6) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.

(8) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(9) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(10) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?