Simple Interest
Math MCQs

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

Correct Answer  $3996

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 4% × 2

= $3700 ×⁴/₁₀₀ × 2

= ^{3700 × 4 × 2}/₁₀₀

= ^{14800 × 2}/₁₀₀

= ²⁹⁶⁰⁰/₁₀₀

= $296

Thus, Simple Interest = $296

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 = $3700 + $296

= $3996

Thus, Amount to be paid = $3996 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 = $3700

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3700 + ($3700 × 4% × 2)

= $3700 + ($3700 ×⁴/₁₀₀ × 2)

= $3700 + (^{3700 × 4 × 2}/₁₀₀)

= $3700 + (^{14800 × 2}/₁₀₀)

= $3700 + (²⁹⁶⁰⁰/₁₀₀)

= $3700 + $296 = $3996

Thus, Amount (A) to be paid = $3996 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 $3700, the simple interest in 1 year

= ⁴/₁₀₀ × 3700

= ^{4 × 3700}/₁₀₀

= ¹⁴⁸⁰⁰/₁₀₀ = $148

Thus, simple interest for 1 year = $148

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $148 × 2 = $296

Thus, Simple Interest (SI) = $296

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $296

= $3996

Thus, Amount to be paid = $3996 Answer

Similar Questions

(1) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 9% simple interest?

(2) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 3 years.

(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.

(4) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(5) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9348 to clear the loan, then find the time period of the loan.

(6) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?

(7) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.

(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.

(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.

(10) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7980 to clear the loan, then find the time period of the loan.