Simple Interest
Math MCQs

Question :    Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 7 years.

Correct Answer  $6783

Solution & Explanation

Solution

Given,

Principal (P) = $5950

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) = $5950 × 2% × 7

= $5950 ײ/₁₀₀ × 7

= ^{5950 × 2 × 7}/₁₀₀

= ^{11900 × 7}/₁₀₀

= ⁸³³⁰⁰/₁₀₀

= $833

Thus, Simple Interest = $833

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 = $5950 + $833

= $6783

Thus, Amount to be paid = $6783 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 = $5950

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5950 + ($5950 × 2% × 7)

= $5950 + ($5950 ײ/₁₀₀ × 7)

= $5950 + (^{5950 × 2 × 7}/₁₀₀)

= $5950 + (^{11900 × 7}/₁₀₀)

= $5950 + (⁸³³⁰⁰/₁₀₀)

= $5950 + $833 = $6783

Thus, Amount (A) to be paid = $6783 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 $5950, the simple interest in 1 year

= ²/₁₀₀ × 5950

= ^{2 × 5950}/₁₀₀

= ¹¹⁹⁰⁰/₁₀₀ = $119

Thus, simple interest for 1 year = $119

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $119 × 7 = $833

Thus, Simple Interest (SI) = $833

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5950 + $833

= $6783

Thus, Amount to be paid = $6783 Answer

Similar Questions

(1) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 4 years.

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.

(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.

(4) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.

(5) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?

(6) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.

(7) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.

(8) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.

(9) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.

(10) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.