Simple Interest
Math MCQs

Question :    Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.

Correct Answer  $8344

Solution & Explanation

Solution

Given,

Principal (P) = $5600

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) = $5600 × 7% × 7

= $5600 ×⁷/₁₀₀ × 7

= ^{5600 × 7 × 7}/₁₀₀

= ^{39200 × 7}/₁₀₀

= ²⁷⁴⁴⁰⁰/₁₀₀

= $2744

Thus, Simple Interest = $2744

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 = $5600 + $2744

= $8344

Thus, Amount to be paid = $8344 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 = $5600

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5600 + ($5600 × 7% × 7)

= $5600 + ($5600 ×⁷/₁₀₀ × 7)

= $5600 + (^{5600 × 7 × 7}/₁₀₀)

= $5600 + (^{39200 × 7}/₁₀₀)

= $5600 + (²⁷⁴⁴⁰⁰/₁₀₀)

= $5600 + $2744 = $8344

Thus, Amount (A) to be paid = $8344 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 $5600, the simple interest in 1 year

= ⁷/₁₀₀ × 5600

= ^{7 × 5600}/₁₀₀

= ³⁹²⁰⁰/₁₀₀ = $392

Thus, simple interest for 1 year = $392

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $392 × 7 = $2744

Thus, Simple Interest (SI) = $2744

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $2744

= $8344

Thus, Amount to be paid = $8344 Answer

Similar Questions

(1) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.

(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?

(4) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.

(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.

(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.

(8) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?

(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 7% simple interest?

(10) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.