Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.

Correct Answer  $6912

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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) = $5400 × 4% × 7

= $5400 ×⁴/₁₀₀ × 7

= ^{5400 × 4 × 7}/₁₀₀

= ^{21600 × 7}/₁₀₀

= ¹⁵¹²⁰⁰/₁₀₀

= $1512

Thus, Simple Interest = $1512

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 = $5400 + $1512

= $6912

Thus, Amount to be paid = $6912 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 = $5400

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5400 + ($5400 × 4% × 7)

= $5400 + ($5400 ×⁴/₁₀₀ × 7)

= $5400 + (^{5400 × 4 × 7}/₁₀₀)

= $5400 + (^{21600 × 7}/₁₀₀)

= $5400 + (¹⁵¹²⁰⁰/₁₀₀)

= $5400 + $1512 = $6912

Thus, Amount (A) to be paid = $6912 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 $5400, the simple interest in 1 year

= ⁴/₁₀₀ × 5400

= ^{4 × 5400}/₁₀₀

= ²¹⁶⁰⁰/₁₀₀ = $216

Thus, simple interest for 1 year = $216

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $216 × 7 = $1512

Thus, Simple Interest (SI) = $1512

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $1512

= $6912

Thus, Amount to be paid = $6912 Answer

Similar Questions

(1) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.

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

(4) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.

(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?

(7) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.

(8) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $9400 to clear the loan, then find the time period of the loan.

(9) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.

(10) In how much time a principal of $3200 will amount to $3520 at a simple interest of 2% per annum?