Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.

Correct Answer  $7420

Solution & Explanation

Solution

Given,

Principal (P) = $5300

Rate of Simple Interest (SI) = 4%

Time (t) = 10 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5300 × 4% × 10

= $5300 ×⁴/₁₀₀ × 10

= ^{5300 × 4 × 10}/₁₀₀

= ^{21200 × 10}/₁₀₀

= ²¹²⁰⁰⁰/₁₀₀

= $2120

Thus, Simple Interest = $2120

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 = $5300 + $2120

= $7420

Thus, Amount to be paid = $7420 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 = $5300

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 10 years

Thus, Amount (A)

= $5300 + ($5300 × 4% × 10)

= $5300 + ($5300 ×⁴/₁₀₀ × 10)

= $5300 + (^{5300 × 4 × 10}/₁₀₀)

= $5300 + (^{21200 × 10}/₁₀₀)

= $5300 + (²¹²⁰⁰⁰/₁₀₀)

= $5300 + $2120 = $7420

Thus, Amount (A) to be paid = $7420 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $5300, the simple interest in 1 year

= ⁴/₁₀₀ × 5300

= ^{4 × 5300}/₁₀₀

= ²¹²⁰⁰/₁₀₀ = $212

Thus, simple interest for 1 year = $212

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $212 × 10 = $2120

Thus, Simple Interest (SI) = $2120

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5300 + $2120

= $7420

Thus, Amount to be paid = $7420 Answer

Similar Questions

(1) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?

(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.

(3) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.

(5) Robert had to pay $3565 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?

(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.

(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.

(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 3 years.

(10) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.