Simple Interest
Math MCQs

Question :    Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 7 years.

Correct Answer  $6720

Solution & Explanation

Solution

Given,

Principal (P) = $5250

Rate of Simple Interest (SI) = 4%

Time (t) = 7 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5250 × 4% × 7

= $5250 ×⁴/₁₀₀ × 7

= ^{5250 × 4 × 7}/₁₀₀

= ^{21000 × 7}/₁₀₀

= ¹⁴⁷⁰⁰⁰/₁₀₀

= $1470

Thus, Simple Interest = $1470

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 = $5250 + $1470

= $6720

Thus, Amount to be paid = $6720 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 = $5250

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 7 years

Thus, Amount (A)

= $5250 + ($5250 × 4% × 7)

= $5250 + ($5250 ×⁴/₁₀₀ × 7)

= $5250 + (^{5250 × 4 × 7}/₁₀₀)

= $5250 + (^{21000 × 7}/₁₀₀)

= $5250 + (¹⁴⁷⁰⁰⁰/₁₀₀)

= $5250 + $1470 = $6720

Thus, Amount (A) to be paid = $6720 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $5250, the simple interest in 1 year

= ⁴/₁₀₀ × 5250

= ^{4 × 5250}/₁₀₀

= ²¹⁰⁰⁰/₁₀₀ = $210

Thus, simple interest for 1 year = $210

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $210 × 7 = $1470

Thus, Simple Interest (SI) = $1470

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5250 + $1470

= $6720

Thus, Amount to be paid = $6720 Answer

Similar Questions

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

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.

(3) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.

(4) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.

(6) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(7) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(8) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(9) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.

(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.