Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.

Correct Answer  $9520

Solution & Explanation

Solution

Given,

Principal (P) = $5600

Rate of Simple Interest (SI) = 7%

Time (t) = 10 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) = $5600 × 7% × 10

= $5600 ×⁷/₁₀₀ × 10

= ^{5600 × 7 × 10}/₁₀₀

= ^{39200 × 10}/₁₀₀

= ³⁹²⁰⁰⁰/₁₀₀

= $3920

Thus, Simple Interest = $3920

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 = $5600 + $3920

= $9520

Thus, Amount to be paid = $9520 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 = $5600

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 10 years

Thus, Amount (A)

= $5600 + ($5600 × 7% × 10)

= $5600 + ($5600 ×⁷/₁₀₀ × 10)

= $5600 + (^{5600 × 7 × 10}/₁₀₀)

= $5600 + (^{39200 × 10}/₁₀₀)

= $5600 + (³⁹²⁰⁰⁰/₁₀₀)

= $5600 + $3920 = $9520

Thus, Amount (A) to be paid = $9520 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 $5600, the simple interest in 1 year

= ⁷/₁₀₀ × 5600

= ^{7 × 5600}/₁₀₀

= ³⁹²⁰⁰/₁₀₀ = $392

Thus, simple interest for 1 year = $392

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $392 × 10 = $3920

Thus, Simple Interest (SI) = $3920

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5600 + $3920

= $9520

Thus, Amount to be paid = $9520 Answer

Similar Questions

(1) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?

(2) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.

(3) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.

(4) How much loan did Jason borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8470 to clear it?

(5) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?

(6) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?

(8) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?

(9) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.

(10) How much loan did Patricia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6437.5 to clear it?