Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 7 years.

Correct Answer  $6270

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 2% × 7

= $5500 ײ/₁₀₀ × 7

= ^{5500 × 2 × 7}/₁₀₀

= ^{11000 × 7}/₁₀₀

= ⁷⁷⁰⁰⁰/₁₀₀

= $770

Thus, Simple Interest = $770

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 = $5500 + $770

= $6270

Thus, Amount to be paid = $6270 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 = $5500

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5500 + ($5500 × 2% × 7)

= $5500 + ($5500 ײ/₁₀₀ × 7)

= $5500 + (^{5500 × 2 × 7}/₁₀₀)

= $5500 + (^{11000 × 7}/₁₀₀)

= $5500 + (⁷⁷⁰⁰⁰/₁₀₀)

= $5500 + $770 = $6270

Thus, Amount (A) to be paid = $6270 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 $5500, the simple interest in 1 year

= ²/₁₀₀ × 5500

= ^{2 × 5500}/₁₀₀

= ¹¹⁰⁰⁰/₁₀₀ = $110

Thus, simple interest for 1 year = $110

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $110 × 7 = $770

Thus, Simple Interest (SI) = $770

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $770

= $6270

Thus, Amount to be paid = $6270 Answer

Similar Questions

(1) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?

(2) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.

(3) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.

(4) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?

(5) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?

(6) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?

(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.

(8) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.

(9) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.

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