Simple Interest
Math MCQs

Question :    What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?

Correct Answer  $4725

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 7% × 5

= $3500 ×⁷/₁₀₀ × 5

= ^{3500 × 7 × 5}/₁₀₀

= ^{24500 × 5}/₁₀₀

= ¹²²⁵⁰⁰/₁₀₀

= $1225

Thus, Simple Interest = $1225

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 + $1225

= $4725

Thus, Amount to be paid = $4725 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) = 5 years

Thus, Amount (A)

= $3500 + ($3500 × 7% × 5)

= $3500 + ($3500 ×⁷/₁₀₀ × 5)

= $3500 + (^{3500 × 7 × 5}/₁₀₀)

= $3500 + (^{24500 × 5}/₁₀₀)

= $3500 + (¹²²⁵⁰⁰/₁₀₀)

= $3500 + $1225 = $4725

Thus, Amount (A) to be paid = $4725 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 5 years

= Simple interest for 1 year × 5

= $245 × 5 = $1225

Thus, Simple Interest (SI) = $1225

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $1225

= $4725

Thus, Amount to be paid = $4725 Answer

Similar Questions

(1) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.

(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?

(3) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.

(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.

(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?

(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.

(7) If Steven paid $5336 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(8) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(9) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.

(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?