Simple Interest
Math MCQs

Question :    Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.

Correct Answer  $7104

Solution & Explanation

Solution

Given,

Principal (P) = $5550

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) = $5550 × 4% × 7

= $5550 ×⁴/₁₀₀ × 7

= ^{5550 × 4 × 7}/₁₀₀

= ^{22200 × 7}/₁₀₀

= ¹⁵⁵⁴⁰⁰/₁₀₀

= $1554

Thus, Simple Interest = $1554

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 = $5550 + $1554

= $7104

Thus, Amount to be paid = $7104 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 = $5550

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5550 + ($5550 × 4% × 7)

= $5550 + ($5550 ×⁴/₁₀₀ × 7)

= $5550 + (^{5550 × 4 × 7}/₁₀₀)

= $5550 + (^{22200 × 7}/₁₀₀)

= $5550 + (¹⁵⁵⁴⁰⁰/₁₀₀)

= $5550 + $1554 = $7104

Thus, Amount (A) to be paid = $7104 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 $5550, the simple interest in 1 year

= ⁴/₁₀₀ × 5550

= ^{4 × 5550}/₁₀₀

= ²²²⁰⁰/₁₀₀ = $222

Thus, simple interest for 1 year = $222

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $222 × 7 = $1554

Thus, Simple Interest (SI) = $1554

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5550 + $1554

= $7104

Thus, Amount to be paid = $7104 Answer

Similar Questions

(1) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.

(2) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 3 years.

(3) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.

(4) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.

(5) If Joseph paid $4440 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 7 years.

(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.

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

(9) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.

(10) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.