Simple Interest
Math MCQs

Question :    Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 3 years.

Correct Answer  $4235

Solution & Explanation

Solution

Given,

Principal (P) = $3500

Rate of Simple Interest (SI) = 7%

Time (t) = 3 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) = $3500 × 7% × 3

= $3500 ×⁷/₁₀₀ × 3

= ^{3500 × 7 × 3}/₁₀₀

= ^{24500 × 3}/₁₀₀

= ⁷³⁵⁰⁰/₁₀₀

= $735

Thus, Simple Interest = $735

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 = $3500 + $735

= $4235

Thus, Amount to be paid = $4235 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 = $3500

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

And, Time (t) = 3 years

Thus, Amount (A)

= $3500 + ($3500 × 7% × 3)

= $3500 + ($3500 ×⁷/₁₀₀ × 3)

= $3500 + (^{3500 × 7 × 3}/₁₀₀)

= $3500 + (^{24500 × 3}/₁₀₀)

= $3500 + (⁷³⁵⁰⁰/₁₀₀)

= $3500 + $735 = $4235

Thus, Amount (A) to be paid = $4235 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 $3500, the simple interest in 1 year

= ⁷/₁₀₀ × 3500

= ^{7 × 3500}/₁₀₀

= ²⁴⁵⁰⁰/₁₀₀ = $245

Thus, simple interest for 1 year = $245

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $245 × 3 = $735

Thus, Simple Interest (SI) = $735

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $735

= $4235

Thus, Amount to be paid = $4235 Answer

Similar Questions

(1) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.

(3) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.

(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.

(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.

(6) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.

(7) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?

(8) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.

(9) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?

(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?