Simple Interest
Math MCQs

Question :    Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 7 years.

Correct Answer  $6784

Solution & Explanation

Solution

Given,

Principal (P) = $5300

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) = $5300 × 4% × 7

= $5300 ×⁴/₁₀₀ × 7

= ^{5300 × 4 × 7}/₁₀₀

= ^{21200 × 7}/₁₀₀

= ¹⁴⁸⁴⁰⁰/₁₀₀

= $1484

Thus, Simple Interest = $1484

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 = $5300 + $1484

= $6784

Thus, Amount to be paid = $6784 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 = $5300

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5300 + ($5300 × 4% × 7)

= $5300 + ($5300 ×⁴/₁₀₀ × 7)

= $5300 + (^{5300 × 4 × 7}/₁₀₀)

= $5300 + (^{21200 × 7}/₁₀₀)

= $5300 + (¹⁴⁸⁴⁰⁰/₁₀₀)

= $5300 + $1484 = $6784

Thus, Amount (A) to be paid = $6784 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 $5300, the simple interest in 1 year

= ⁴/₁₀₀ × 5300

= ^{4 × 5300}/₁₀₀

= ²¹²⁰⁰/₁₀₀ = $212

Thus, simple interest for 1 year = $212

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $212 × 7 = $1484

Thus, Simple Interest (SI) = $1484

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $1484

= $6784

Thus, Amount to be paid = $6784 Answer

Similar Questions

(1) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 3 years.

(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.

(3) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.

(5) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?

(6) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.

(7) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.

(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?

(10) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 9% simple interest?