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) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 9% simple interest?

(2) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.

(4) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9020 to clear the loan, then find the time period of the loan.

(5) How much loan did Andrew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7820 to clear it?

(6) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.

(8) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.

(9) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?

(10) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 3 years.