Simple Interest
Math MCQs

Question :    What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?

Correct Answer  $4590

Solution & Explanation

Solution

Given,

Principal (P) = $3400

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) = $3400 × 7% × 5

= $3400 ×⁷/₁₀₀ × 5

= ^{3400 × 7 × 5}/₁₀₀

= ^{23800 × 5}/₁₀₀

= ¹¹⁹⁰⁰⁰/₁₀₀

= $1190

Thus, Simple Interest = $1190

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 = $3400 + $1190

= $4590

Thus, Amount to be paid = $4590 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 = $3400

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3400 + ($3400 × 7% × 5)

= $3400 + ($3400 ×⁷/₁₀₀ × 5)

= $3400 + (^{3400 × 7 × 5}/₁₀₀)

= $3400 + (^{23800 × 5}/₁₀₀)

= $3400 + (¹¹⁹⁰⁰⁰/₁₀₀)

= $3400 + $1190 = $4590

Thus, Amount (A) to be paid = $4590 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 $3400, the simple interest in 1 year

= ⁷/₁₀₀ × 3400

= ^{7 × 3400}/₁₀₀

= ²³⁸⁰⁰/₁₀₀ = $238

Thus, simple interest for 1 year = $238

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $238 × 5 = $1190

Thus, Simple Interest (SI) = $1190

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $1190

= $4590

Thus, Amount to be paid = $4590 Answer

Similar Questions

(1) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 4 years.

(3) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.

(4) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.

(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.

(7) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.

(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.

(9) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.

(10) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.