Simple Interest
Math MCQs

Question :    Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.

Correct Answer  $7424

Solution & Explanation

Solution

Given,

Principal (P) = $5800

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) = $5800 × 4% × 7

= $5800 ×⁴/₁₀₀ × 7

= ^{5800 × 4 × 7}/₁₀₀

= ^{23200 × 7}/₁₀₀

= ¹⁶²⁴⁰⁰/₁₀₀

= $1624

Thus, Simple Interest = $1624

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 = $5800 + $1624

= $7424

Thus, Amount to be paid = $7424 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 = $5800

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5800 + ($5800 × 4% × 7)

= $5800 + ($5800 ×⁴/₁₀₀ × 7)

= $5800 + (^{5800 × 4 × 7}/₁₀₀)

= $5800 + (^{23200 × 7}/₁₀₀)

= $5800 + (¹⁶²⁴⁰⁰/₁₀₀)

= $5800 + $1624 = $7424

Thus, Amount (A) to be paid = $7424 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 $5800, the simple interest in 1 year

= ⁴/₁₀₀ × 5800

= ^{4 × 5800}/₁₀₀

= ²³²⁰⁰/₁₀₀ = $232

Thus, simple interest for 1 year = $232

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $232 × 7 = $1624

Thus, Simple Interest (SI) = $1624

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5800 + $1624

= $7424

Thus, Amount to be paid = $7424 Answer

Similar Questions

(1) If Christopher paid $4800 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(2) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.

(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.

(4) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5960 to clear the loan, then find the time period of the loan.

(5) Jessica had to pay $4312.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) How much loan did Joshua borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7935 to clear it?

(7) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?

(8) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 4% simple interest?

(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.

(10) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.