Simple Interest
Math MCQs

Question :    Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.

Correct Answer  $6099

Solution & Explanation

Solution

Given,

Principal (P) = $5350

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) = $5350 × 2% × 7

= $5350 ײ/₁₀₀ × 7

= ^{5350 × 2 × 7}/₁₀₀

= ^{10700 × 7}/₁₀₀

= ⁷⁴⁹⁰⁰/₁₀₀

= $749

Thus, Simple Interest = $749

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 = $5350 + $749

= $6099

Thus, Amount to be paid = $6099 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 = $5350

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5350 + ($5350 × 2% × 7)

= $5350 + ($5350 ײ/₁₀₀ × 7)

= $5350 + (^{5350 × 2 × 7}/₁₀₀)

= $5350 + (^{10700 × 7}/₁₀₀)

= $5350 + (⁷⁴⁹⁰⁰/₁₀₀)

= $5350 + $749 = $6099

Thus, Amount (A) to be paid = $6099 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 $5350, the simple interest in 1 year

= ²/₁₀₀ × 5350

= ^{2 × 5350}/₁₀₀

= ¹⁰⁷⁰⁰/₁₀₀ = $107

Thus, simple interest for 1 year = $107

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $107 × 7 = $749

Thus, Simple Interest (SI) = $749

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5350 + $749

= $6099

Thus, Amount to be paid = $6099 Answer

Similar Questions

(1) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.

(2) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?

(3) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?

(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 4 years.

(5) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?

(6) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?

(7) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) How much loan did Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?

(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?

(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.