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) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.

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

(3) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.

(4) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.

(5) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.

(7) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?

(8) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.

(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7425 to clear it?