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Simple Interest
Math MCQs


Question :    Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.


Correct Answer  $4416

Solution & Explanation

Solution

Given,

Principal (P) = $3450

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) = $3450 × 7% × 4

= $3450 ×7/100 × 4

= 3450 × 7 × 4/100

= 24150 × 4/100

= 96600/100

= $966

Thus, Simple Interest = $966

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 = $3450 + $966

= $4416

Thus, Amount to be paid = $4416 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 = $3450

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3450 + ($3450 × 7% × 4)

= $3450 + ($3450 ×7/100 × 4)

= $3450 + (3450 × 7 × 4/100)

= $3450 + (24150 × 4/100)

= $3450 + (96600/100)

= $3450 + $966 = $4416

Thus, Amount (A) to be paid = $4416 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 $3450, the simple interest in 1 year

= 7/100 × 3450

= 7 × 3450/100

= 24150/100 = $241.5

Thus, simple interest for 1 year = $241.5

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $241.5 × 4 = $966

Thus, Simple Interest (SI) = $966

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $966

= $4416

Thus, Amount to be paid = $4416 Answer


Similar Questions

(1) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 5% simple interest?

(2) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.

(3) If Mark paid $4752 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(4) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.

(5) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 5% simple interest?

(6) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.

(7) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.

(8) If Emily paid $5320 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(9) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 4 years.