Simple Interest
Math MCQs

Question :    Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.

Correct Answer  $9180

Solution & Explanation

Solution

Given,

Principal (P) = $5400

Rate of Simple Interest (SI) = 10%

Time (t) = 7 years

Thus, Amount (A) = ?

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

Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 7

= $5400 ×¹⁰/₁₀₀ × 7

= ^{5400 × 10 × 7}/₁₀₀

= ^{54000 × 7}/₁₀₀

= ³⁷⁸⁰⁰⁰/₁₀₀

= $3780

Thus, Simple Interest = $3780

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 + $3780

= $9180

Thus, Amount to be paid = $9180 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) = 10%

And, Time (t) = 7 years

Thus, Amount (A)

= $5400 + ($5400 × 10% × 7)

= $5400 + ($5400 ×¹⁰/₁₀₀ × 7)

= $5400 + (^{5400 × 10 × 7}/₁₀₀)

= $5400 + (^{54000 × 7}/₁₀₀)

= $5400 + (³⁷⁸⁰⁰⁰/₁₀₀)

= $5400 + $3780 = $9180

Thus, Amount (A) to be paid = $9180 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 10%

This, means, $10 per $100 per year

∵ For $100, the simple interest for 1 year = $10

∴ For $1, the simple interest for 1 year = ¹⁰/₁₀₀

∴ For $5400, the simple interest in 1 year

= ¹⁰/₁₀₀ × 5400

= ^{10 × 5400}/₁₀₀

= ⁵⁴⁰⁰⁰/₁₀₀ = $540

Thus, simple interest for 1 year = $540

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $540 × 7 = $3780

Thus, Simple Interest (SI) = $3780

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5400 + $3780

= $9180

Thus, Amount to be paid = $9180 Answer

Similar Questions

(1) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.

(2) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.

(3) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 5% simple interest?

(4) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(5) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?

(6) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.

(7) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(9) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?

(10) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.