Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?

Correct Answer  $4050

Solution & Explanation

Solution

Given,

Principal (P) = $3750

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) = $3750 × 4% × 2

= $3750 ×⁴/₁₀₀ × 2

= ^{3750 × 4 × 2}/₁₀₀

= ^{15000 × 2}/₁₀₀

= ³⁰⁰⁰⁰/₁₀₀

= $300

Thus, Simple Interest = $300

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 = $3750 + $300

= $4050

Thus, Amount to be paid = $4050 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 = $3750

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3750 + ($3750 × 4% × 2)

= $3750 + ($3750 ×⁴/₁₀₀ × 2)

= $3750 + (^{3750 × 4 × 2}/₁₀₀)

= $3750 + (^{15000 × 2}/₁₀₀)

= $3750 + (³⁰⁰⁰⁰/₁₀₀)

= $3750 + $300 = $4050

Thus, Amount (A) to be paid = $4050 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 $3750, the simple interest in 1 year

= ⁴/₁₀₀ × 3750

= ^{4 × 3750}/₁₀₀

= ¹⁵⁰⁰⁰/₁₀₀ = $150

Thus, simple interest for 1 year = $150

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $150 × 2 = $300

Thus, Simple Interest (SI) = $300

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3750 + $300

= $4050

Thus, Amount to be paid = $4050 Answer

Similar Questions

(1) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(2) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.

(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.

(4) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.

(5) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.

(6) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.

(8) What amount does William have to pay after 6 years if he takes a loan of $3500 at 4% simple interest?

(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.

(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.