Simple Interest
Math MCQs

Question :    Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.

Correct Answer  $4480

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 7% × 4

= $3500 ×⁷/₁₀₀ × 4

= ^{3500 × 7 × 4}/₁₀₀

= ^{24500 × 4}/₁₀₀

= ⁹⁸⁰⁰⁰/₁₀₀

= $980

Thus, Simple Interest = $980

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 + $980

= $4480

Thus, Amount to be paid = $4480 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) = 4 years

Thus, Amount (A)

= $3500 + ($3500 × 7% × 4)

= $3500 + ($3500 ×⁷/₁₀₀ × 4)

= $3500 + (^{3500 × 7 × 4}/₁₀₀)

= $3500 + (^{24500 × 4}/₁₀₀)

= $3500 + (⁹⁸⁰⁰⁰/₁₀₀)

= $3500 + $980 = $4480

Thus, Amount (A) to be paid = $4480 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 4 years

= Simple interest for 1 year × 4

= $245 × 4 = $980

Thus, Simple Interest (SI) = $980

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $980

= $4480

Thus, Amount to be paid = $4480 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.

(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.

(3) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?

(4) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.

(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.

(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?

(8) What amount will be due after 2 years if William borrowed a sum of $3250 at a 5% simple interest?

(9) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?