Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?

Correct Answer  $3294

Solution & Explanation

Solution

Given,

Principal (P) = $3050

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) = $3050 × 4% × 2

= $3050 ×⁴/₁₀₀ × 2

= ^{3050 × 4 × 2}/₁₀₀

= ^{12200 × 2}/₁₀₀

= ²⁴⁴⁰⁰/₁₀₀

= $244

Thus, Simple Interest = $244

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 = $3050 + $244

= $3294

Thus, Amount to be paid = $3294 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 = $3050

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3050 + ($3050 × 4% × 2)

= $3050 + ($3050 ×⁴/₁₀₀ × 2)

= $3050 + (^{3050 × 4 × 2}/₁₀₀)

= $3050 + (^{12200 × 2}/₁₀₀)

= $3050 + (²⁴⁴⁰⁰/₁₀₀)

= $3050 + $244 = $3294

Thus, Amount (A) to be paid = $3294 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 $3050, the simple interest in 1 year

= ⁴/₁₀₀ × 3050

= ^{4 × 3050}/₁₀₀

= ¹²²⁰⁰/₁₀₀ = $122

Thus, simple interest for 1 year = $122

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $122 × 2 = $244

Thus, Simple Interest (SI) = $244

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3050 + $244

= $3294

Thus, Amount to be paid = $3294 Answer

Similar Questions

(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.

(2) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?

(3) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.

(5) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.

(6) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.

(7) Thomas had to pay $4028 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 4 years.

(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.