Simple Interest
Math MCQs

Question :    Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 7 years.

Correct Answer  $9350

Solution & Explanation

Solution

Given,

Principal (P) = $5500

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) = $5500 × 10% × 7

= $5500 ×¹⁰/₁₀₀ × 7

= ^{5500 × 10 × 7}/₁₀₀

= ^{55000 × 7}/₁₀₀

= ³⁸⁵⁰⁰⁰/₁₀₀

= $3850

Thus, Simple Interest = $3850

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 = $5500 + $3850

= $9350

Thus, Amount to be paid = $9350 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 = $5500

Rate of Simple Interest (SI) or (R) = 10%

And, Time (t) = 7 years

Thus, Amount (A)

= $5500 + ($5500 × 10% × 7)

= $5500 + ($5500 ×¹⁰/₁₀₀ × 7)

= $5500 + (^{5500 × 10 × 7}/₁₀₀)

= $5500 + (^{55000 × 7}/₁₀₀)

= $5500 + (³⁸⁵⁰⁰⁰/₁₀₀)

= $5500 + $3850 = $9350

Thus, Amount (A) to be paid = $9350 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 $5500, the simple interest in 1 year

= ¹⁰/₁₀₀ × 5500

= ^{10 × 5500}/₁₀₀

= ⁵⁵⁰⁰⁰/₁₀₀ = $550

Thus, simple interest for 1 year = $550

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $550 × 7 = $3850

Thus, Simple Interest (SI) = $3850

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5500 + $3850

= $9350

Thus, Amount to be paid = $9350 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.

(2) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?

(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?

(4) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?

(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.

(6) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) If Christopher borrowed $4000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(8) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.

(9) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?

(10) If Michelle paid $5940 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.