Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.

Correct Answer  $7040

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 4% × 7

= $5500 ×⁴/₁₀₀ × 7

= ^{5500 × 4 × 7}/₁₀₀

= ^{22000 × 7}/₁₀₀

= ¹⁵⁴⁰⁰⁰/₁₀₀

= $1540

Thus, Simple Interest = $1540

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 = $5500 + $1540

= $7040

Thus, Amount to be paid = $7040 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 = $5500

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5500 + ($5500 × 4% × 7)

= $5500 + ($5500 ×⁴/₁₀₀ × 7)

= $5500 + (^{5500 × 4 × 7}/₁₀₀)

= $5500 + (^{22000 × 7}/₁₀₀)

= $5500 + (¹⁵⁴⁰⁰⁰/₁₀₀)

= $5500 + $1540 = $7040

Thus, Amount (A) to be paid = $7040 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 $5500, the simple interest in 1 year

= ⁴/₁₀₀ × 5500

= ^{4 × 5500}/₁₀₀

= ²²⁰⁰⁰/₁₀₀ = $220

Thus, simple interest for 1 year = $220

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $220 × 7 = $1540

Thus, Simple Interest (SI) = $1540

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $1540

= $7040

Thus, Amount to be paid = $7040 Answer

Similar Questions

(1) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.

(2) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(3) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.

(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?

(5) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.

(6) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?

(7) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.

(8) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.

(9) Lisa had to pay $4536 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(10) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.