Simple Interest
Math MCQs

Question :    What amount does John have to pay after 5 years if he takes a loan of $3200 at 7% simple interest?

Correct Answer  $4320

Solution & Explanation

Solution

Given,

Principal (P) = $3200

Rate of Simple Interest (SI) = 7%

Time (t) = 5 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) = $3200 × 7% × 5

= $3200 ×⁷/₁₀₀ × 5

= ^{3200 × 7 × 5}/₁₀₀

= ^{22400 × 5}/₁₀₀

= ¹¹²⁰⁰⁰/₁₀₀

= $1120

Thus, Simple Interest = $1120

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 = $3200 + $1120

= $4320

Thus, Amount to be paid = $4320 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 = $3200

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3200 + ($3200 × 7% × 5)

= $3200 + ($3200 ×⁷/₁₀₀ × 5)

= $3200 + (^{3200 × 7 × 5}/₁₀₀)

= $3200 + (^{22400 × 5}/₁₀₀)

= $3200 + (¹¹²⁰⁰⁰/₁₀₀)

= $3200 + $1120 = $4320

Thus, Amount (A) to be paid = $4320 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 $3200, the simple interest in 1 year

= ⁷/₁₀₀ × 3200

= ^{7 × 3200}/₁₀₀

= ²²⁴⁰⁰/₁₀₀ = $224

Thus, simple interest for 1 year = $224

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $224 × 5 = $1120

Thus, Simple Interest (SI) = $1120

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $1120

= $4320

Thus, Amount to be paid = $4320 Answer

Similar Questions

(1) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 10% simple interest?

(2) Jessica had to pay $4312.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(3) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.

(5) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.

(6) Linda had to pay $3752 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.

(8) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.

(10) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 9% simple interest?