Simple Interest
Math MCQs

Question :    Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.

Correct Answer  $6042

Solution & Explanation

Solution

Given,

Principal (P) = $5300

Rate of Simple Interest (SI) = 2%

Time (t) = 7 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $5300 × 2% × 7

= $5300 ײ/₁₀₀ × 7

= ^{5300 × 2 × 7}/₁₀₀

= ^{10600 × 7}/₁₀₀

= ⁷⁴²⁰⁰/₁₀₀

= $742

Thus, Simple Interest = $742

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 = $5300 + $742

= $6042

Thus, Amount to be paid = $6042 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 = $5300

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 7 years

Thus, Amount (A)

= $5300 + ($5300 × 2% × 7)

= $5300 + ($5300 ײ/₁₀₀ × 7)

= $5300 + (^{5300 × 2 × 7}/₁₀₀)

= $5300 + (^{10600 × 7}/₁₀₀)

= $5300 + (⁷⁴²⁰⁰/₁₀₀)

= $5300 + $742 = $6042

Thus, Amount (A) to be paid = $6042 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $5300, the simple interest in 1 year

= ²/₁₀₀ × 5300

= ^{2 × 5300}/₁₀₀

= ¹⁰⁶⁰⁰/₁₀₀ = $106

Thus, simple interest for 1 year = $106

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $106 × 7 = $742

Thus, Simple Interest (SI) = $742

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $742

= $6042

Thus, Amount to be paid = $6042 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.

(2) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $5848 to clear the loan, then find the time period of the loan.

(4) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.

(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 6% simple interest?

(6) In how much time a principal of $3100 will amount to $3472 at a simple interest of 3% per annum?

(7) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 4 years.

(9) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?

(10) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.