Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.

Correct Answer  $6156

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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) = $5400 × 2% × 7

= $5400 ײ/₁₀₀ × 7

= ^{5400 × 2 × 7}/₁₀₀

= ^{10800 × 7}/₁₀₀

= ⁷⁵⁶⁰⁰/₁₀₀

= $756

Thus, Simple Interest = $756

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 = $5400 + $756

= $6156

Thus, Amount to be paid = $6156 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 = $5400

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5400 + ($5400 × 2% × 7)

= $5400 + ($5400 ײ/₁₀₀ × 7)

= $5400 + (^{5400 × 2 × 7}/₁₀₀)

= $5400 + (^{10800 × 7}/₁₀₀)

= $5400 + (⁷⁵⁶⁰⁰/₁₀₀)

= $5400 + $756 = $6156

Thus, Amount (A) to be paid = $6156 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 $5400, the simple interest in 1 year

= ²/₁₀₀ × 5400

= ^{2 × 5400}/₁₀₀

= ¹⁰⁸⁰⁰/₁₀₀ = $108

Thus, simple interest for 1 year = $108

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $108 × 7 = $756

Thus, Simple Interest (SI) = $756

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $756

= $6156

Thus, Amount to be paid = $6156 Answer

Similar Questions

(1) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(2) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?

(3) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.

(5) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.

(7) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.

(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 8 years.

(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.