Simple Interest
Math MCQs

Question :    What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?

Correct Answer  $4455

Solution & Explanation

Solution

Given,

Principal (P) = $3300

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) = $3300 × 7% × 5

= $3300 ×⁷/₁₀₀ × 5

= ^{3300 × 7 × 5}/₁₀₀

= ^{23100 × 5}/₁₀₀

= ¹¹⁵⁵⁰⁰/₁₀₀

= $1155

Thus, Simple Interest = $1155

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 + $1155

= $4455

Thus, Amount to be paid = $4455 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) = 5 years

Thus, Amount (A)

= $3300 + ($3300 × 7% × 5)

= $3300 + ($3300 ×⁷/₁₀₀ × 5)

= $3300 + (^{3300 × 7 × 5}/₁₀₀)

= $3300 + (^{23100 × 5}/₁₀₀)

= $3300 + (¹¹⁵⁵⁰⁰/₁₀₀)

= $3300 + $1155 = $4455

Thus, Amount (A) to be paid = $4455 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 5 years

= Simple interest for 1 year × 5

= $231 × 5 = $1155

Thus, Simple Interest (SI) = $1155

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3300 + $1155

= $4455

Thus, Amount to be paid = $4455 Answer

Similar Questions

(1) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.

(2) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?

(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?

(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.

(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?

(7) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?

(9) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?

(10) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.