Simple Interest
Math MCQs

Question :    What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 7% simple interest?

Correct Answer  $5609

Solution & Explanation

Solution

Given,

Principal (P) = $3950

Rate of Simple Interest (SI) = 7%

Time (t) = 6 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) = $3950 × 7% × 6

= $3950 ×⁷/₁₀₀ × 6

= ^{3950 × 7 × 6}/₁₀₀

= ^{27650 × 6}/₁₀₀

= ¹⁶⁵⁹⁰⁰/₁₀₀

= $1659

Thus, Simple Interest = $1659

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 = $3950 + $1659

= $5609

Thus, Amount to be paid = $5609 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 = $3950

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3950 + ($3950 × 7% × 6)

= $3950 + ($3950 ×⁷/₁₀₀ × 6)

= $3950 + (^{3950 × 7 × 6}/₁₀₀)

= $3950 + (^{27650 × 6}/₁₀₀)

= $3950 + (¹⁶⁵⁹⁰⁰/₁₀₀)

= $3950 + $1659 = $5609

Thus, Amount (A) to be paid = $5609 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 $3950, the simple interest in 1 year

= ⁷/₁₀₀ × 3950

= ^{7 × 3950}/₁₀₀

= ²⁷⁶⁵⁰/₁₀₀ = $276.5

Thus, simple interest for 1 year = $276.5

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $276.5 × 6 = $1659

Thus, Simple Interest (SI) = $1659

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $1659

= $5609

Thus, Amount to be paid = $5609 Answer

Similar Questions

(1) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?

(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.

(3) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?

(4) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?

(5) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 3 years.

(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.

(8) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?

(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.

(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.