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) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.

(2) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.

(3) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.

(4) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.

(5) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?

(6) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?

(7) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?

(8) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.

(9) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.

(10) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?