Simple Interest
Math MCQs

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

Correct Answer  $3240

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 4%

Time (t) = 2 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) = $3000 × 4% × 2

= $3000 ×⁴/₁₀₀ × 2

= ^{3000 × 4 × 2}/₁₀₀

= ^{12000 × 2}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀

= $240

Thus, Simple Interest = $240

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 = $3000 + $240

= $3240

Thus, Amount to be paid = $3240 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 = $3000

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3000 + ($3000 × 4% × 2)

= $3000 + ($3000 ×⁴/₁₀₀ × 2)

= $3000 + (^{3000 × 4 × 2}/₁₀₀)

= $3000 + (^{12000 × 2}/₁₀₀)

= $3000 + (²⁴⁰⁰⁰/₁₀₀)

= $3000 + $240 = $3240

Thus, Amount (A) to be paid = $3240 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 $3000, the simple interest in 1 year

= ⁴/₁₀₀ × 3000

= ^{4 × 3000}/₁₀₀

= ¹²⁰⁰⁰/₁₀₀ = $120

Thus, simple interest for 1 year = $120

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $120 × 2 = $240

Thus, Simple Interest (SI) = $240

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $240

= $3240

Thus, Amount to be paid = $3240 Answer

Similar Questions

(1) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 4 years.

(3) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?

(4) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?

(5) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 2% simple interest.

(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.

(8) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.

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