Simple Interest
MCQs Math


Question:     Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.


Correct Answer  $7104

Solution And Explanation

Solution

Given,

Principal (P) = $5550

Rate of Simple Interest (SI) = 4%

Time (t) = 7 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) = $5550 × 4% × 7

= $5550 ×4/100 × 7

= 5550 × 4 × 7/100

= 22200 × 7/100

= 155400/100

= $1554

Thus, Simple Interest = $1554

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 = $5550 + $1554

= $7104

Thus, Amount to be paid = $7104 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 = $5550

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

And, Time (t) = 7 years

Thus, Amount (A)

= $5550 + ($5550 × 4% × 7)

= $5550 + ($5550 ×4/100 × 7)

= $5550 + (5550 × 4 × 7/100)

= $5550 + (22200 × 7/100)

= $5550 + (155400/100)

= $5550 + $1554 = $7104

Thus, Amount (A) to be paid = $7104 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 $5550, the simple interest in 1 year

= 4/100 × 5550

= 4 × 5550/100

= 22200/100 = $222

Thus, simple interest for 1 year = $222

Therefore, simple interest for 7 years

= Simple interest for 1 year × 7

= $222 × 7 = $1554

Thus, Simple Interest (SI) = $1554

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5550 + $1554

= $7104

Thus, Amount to be paid = $7104 Answer


Similar Questions

(1) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.

(2) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.

(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?

(5) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.

(6) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?

(7) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.

(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.

(10) Mary had to pay $3324.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.


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