Simple Interest
Math MCQs

Question :    Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.

Correct Answer  $6726

Solution & Explanation

Solution

Given,

Principal (P) = $5900

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) = $5900 × 2% × 7

= $5900 ײ/₁₀₀ × 7

= ^{5900 × 2 × 7}/₁₀₀

= ^{11800 × 7}/₁₀₀

= ⁸²⁶⁰⁰/₁₀₀

= $826

Thus, Simple Interest = $826

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 = $5900 + $826

= $6726

Thus, Amount to be paid = $6726 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 = $5900

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5900 + ($5900 × 2% × 7)

= $5900 + ($5900 ײ/₁₀₀ × 7)

= $5900 + (^{5900 × 2 × 7}/₁₀₀)

= $5900 + (^{11800 × 7}/₁₀₀)

= $5900 + (⁸²⁶⁰⁰/₁₀₀)

= $5900 + $826 = $6726

Thus, Amount (A) to be paid = $6726 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 $5900, the simple interest in 1 year

= ²/₁₀₀ × 5900

= ^{2 × 5900}/₁₀₀

= ¹¹⁸⁰⁰/₁₀₀ = $118

Thus, simple interest for 1 year = $118

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $118 × 7 = $826

Thus, Simple Interest (SI) = $826

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5900 + $826

= $6726

Thus, Amount to be paid = $6726 Answer

Similar Questions

(1) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?

(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.

(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.

(4) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.

(5) Patricia had to pay $3528 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

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

(7) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.

(9) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.