Simple Interest
MCQs Math


Question:     Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.


Correct Answer  $8925

Solution And Explanation

Solution

Given,

Principal (P) = $5250

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) = $5250 × 7% × 10

= $5250 ×7/100 × 10

= 5250 × 7 × 10/100

= 36750 × 10/100

= 367500/100

= $3675

Thus, Simple Interest = $3675

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 = $5250 + $3675

= $8925

Thus, Amount to be paid = $8925 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 = $5250

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

And, Time (t) = 10 years

Thus, Amount (A)

= $5250 + ($5250 × 7% × 10)

= $5250 + ($5250 ×7/100 × 10)

= $5250 + (5250 × 7 × 10/100)

= $5250 + (36750 × 10/100)

= $5250 + (367500/100)

= $5250 + $3675 = $8925

Thus, Amount (A) to be paid = $8925 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 $5250, the simple interest in 1 year

= 7/100 × 5250

= 7 × 5250/100

= 36750/100 = $367.5

Thus, simple interest for 1 year = $367.5

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $367.5 × 10 = $3675

Thus, Simple Interest (SI) = $3675

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5250 + $3675

= $8925

Thus, Amount to be paid = $8925 Answer


Similar Questions

(1) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.

(2) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?

(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.

(4) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.

(6) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.

(7) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.

(9) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?

(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?


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