Simple Interest
Math MCQs

Question :    Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 7% simple interest.

Correct Answer  $8150

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (SI) = 7%

Time (t) = 9 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% × 9

= $5000 ×⁷/₁₀₀ × 9

= ^{5000 × 7 × 9}/₁₀₀

= ^{35000 × 9}/₁₀₀

= ³¹⁵⁰⁰⁰/₁₀₀

= $3150

Thus, Simple Interest = $3150

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 + $3150

= $8150

Thus, Amount to be paid = $8150 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) = 9 years

Thus, Amount (A)

= $5000 + ($5000 × 7% × 9)

= $5000 + ($5000 ×⁷/₁₀₀ × 9)

= $5000 + (^{5000 × 7 × 9}/₁₀₀)

= $5000 + (^{35000 × 9}/₁₀₀)

= $5000 + (³¹⁵⁰⁰⁰/₁₀₀)

= $5000 + $3150 = $8150

Thus, Amount (A) to be paid = $8150 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 9 years

= Simple interest for 1 year × 9

= $350 × 9 = $3150

Thus, Simple Interest (SI) = $3150

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5000 + $3150

= $8150

Thus, Amount to be paid = $8150 Answer

Similar Questions

(1) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?

(2) 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.

(3) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?

(4) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.

(5) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?

(6) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?

(7) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.

(8) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(9) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.