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) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.

(2) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.

(4) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?

(6) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?

(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.

(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.

(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 8 years.

(10) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?