Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.

Correct Answer  $7500

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (SI) = 5%

Time (t) = 10 years

Thus, Amount (A) = ?

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

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 10

= $5000 ×⁵/₁₀₀ × 10

= ^{5000 × 5 × 10}/₁₀₀

= ^{25000 × 10}/₁₀₀

= ²⁵⁰⁰⁰⁰/₁₀₀

= $2500

Thus, Simple Interest = $2500

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 + $2500

= $7500

Thus, Amount to be paid = $7500 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) = 5%

And, Time (t) = 10 years

Thus, Amount (A)

= $5000 + ($5000 × 5% × 10)

= $5000 + ($5000 ×⁵/₁₀₀ × 10)

= $5000 + (^{5000 × 5 × 10}/₁₀₀)

= $5000 + (^{25000 × 10}/₁₀₀)

= $5000 + (²⁵⁰⁰⁰⁰/₁₀₀)

= $5000 + $2500 = $7500

Thus, Amount (A) to be paid = $7500 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $5000, the simple interest in 1 year

= ⁵/₁₀₀ × 5000

= ^{5 × 5000}/₁₀₀

= ²⁵⁰⁰⁰/₁₀₀ = $250

Thus, simple interest for 1 year = $250

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $250 × 10 = $2500

Thus, Simple Interest (SI) = $2500

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5000 + $2500

= $7500

Thus, Amount to be paid = $7500 Answer

Similar Questions

(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.

(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.

(3) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.

(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.

(5) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.

(6) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?

(7) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?

(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.

(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?

(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?