Simple Interest
Math MCQs

Question :    Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.

Correct Answer  $7450

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (SI) = 7%

Time (t) = 7 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $5000 × 7% × 7

= $5000 ×⁷/₁₀₀ × 7

= ^{5000 × 7 × 7}/₁₀₀

= ^{35000 × 7}/₁₀₀

= ²⁴⁵⁰⁰⁰/₁₀₀

= $2450

Thus, Simple Interest = $2450

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 = $5000 + $2450

= $7450

Thus, Amount to be paid = $7450 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 = $5000

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 7 years

Thus, Amount (A)

= $5000 + ($5000 × 7% × 7)

= $5000 + ($5000 ×⁷/₁₀₀ × 7)

= $5000 + (^{5000 × 7 × 7}/₁₀₀)

= $5000 + (^{35000 × 7}/₁₀₀)

= $5000 + (²⁴⁵⁰⁰⁰/₁₀₀)

= $5000 + $2450 = $7450

Thus, Amount (A) to be paid = $7450 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = ⁷/₁₀₀

∴ For $5000, the simple interest in 1 year

= ⁷/₁₀₀ × 5000

= ^{7 × 5000}/₁₀₀

= ³⁵⁰⁰⁰/₁₀₀ = $350

Thus, simple interest for 1 year = $350

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $350 × 7 = $2450

Thus, Simple Interest (SI) = $2450

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5000 + $2450

= $7450

Thus, Amount to be paid = $7450 Answer

Similar Questions

(1) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?

(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 7% simple interest.

(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 7 years.

(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.

(5) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.

(6) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?

(7) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.

(8) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.

(9) How much loan did Steven borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8250 to clear it?

(10) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.