Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.

Correct Answer  $7290

Solution & Explanation

Solution

Given,

Principal (P) = $5400

Rate of Simple Interest (SI) = 5%

Time (t) = 7 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 7

= $5400 ×⁵/₁₀₀ × 7

= ^{5400 × 5 × 7}/₁₀₀

= ^{27000 × 7}/₁₀₀

= ¹⁸⁹⁰⁰⁰/₁₀₀

= $1890

Thus, Simple Interest = $1890

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 + $1890

= $7290

Thus, Amount to be paid = $7290 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) = 5%

And, Time (t) = 7 years

Thus, Amount (A)

= $5400 + ($5400 × 5% × 7)

= $5400 + ($5400 ×⁵/₁₀₀ × 7)

= $5400 + (^{5400 × 5 × 7}/₁₀₀)

= $5400 + (^{27000 × 7}/₁₀₀)

= $5400 + (¹⁸⁹⁰⁰⁰/₁₀₀)

= $5400 + $1890 = $7290

Thus, Amount (A) to be paid = $7290 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $5400, the simple interest in 1 year

= ⁵/₁₀₀ × 5400

= ^{5 × 5400}/₁₀₀

= ²⁷⁰⁰⁰/₁₀₀ = $270

Thus, simple interest for 1 year = $270

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $270 × 7 = $1890

Thus, Simple Interest (SI) = $1890

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $1890

= $7290

Thus, Amount to be paid = $7290 Answer

Similar Questions

(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?

(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.

(3) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?

(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.

(5) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?

(7) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.

(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.

(9) How much loan did Charles borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7080 to clear it?

(10) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.