Simple Interest
Math MCQs

Question :    Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.

Correct Answer  $4224

Solution & Explanation

Solution

Given,

Principal (P) = $3300

Rate of Simple Interest (SI) = 7%

Time (t) = 4 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) = $3300 × 7% × 4

= $3300 ×⁷/₁₀₀ × 4

= ^{3300 × 7 × 4}/₁₀₀

= ^{23100 × 4}/₁₀₀

= ⁹²⁴⁰⁰/₁₀₀

= $924

Thus, Simple Interest = $924

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 = $3300 + $924

= $4224

Thus, Amount to be paid = $4224 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 = $3300

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3300 + ($3300 × 7% × 4)

= $3300 + ($3300 ×⁷/₁₀₀ × 4)

= $3300 + (^{3300 × 7 × 4}/₁₀₀)

= $3300 + (^{23100 × 4}/₁₀₀)

= $3300 + (⁹²⁴⁰⁰/₁₀₀)

= $3300 + $924 = $4224

Thus, Amount (A) to be paid = $4224 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 $3300, the simple interest in 1 year

= ⁷/₁₀₀ × 3300

= ^{7 × 3300}/₁₀₀

= ²³¹⁰⁰/₁₀₀ = $231

Thus, simple interest for 1 year = $231

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $231 × 4 = $924

Thus, Simple Interest (SI) = $924

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3300 + $924

= $4224

Thus, Amount to be paid = $4224 Answer

Similar Questions

(1) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(3) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.

(4) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(5) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?

(6) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.

(7) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.

(8) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(9) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.

(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?