Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?

Correct Answer  $4158

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 4% × 2

= $3850 ×⁴/₁₀₀ × 2

= ^{3850 × 4 × 2}/₁₀₀

= ^{15400 × 2}/₁₀₀

= ³⁰⁸⁰⁰/₁₀₀

= $308

Thus, Simple Interest = $308

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 = $3850 + $308

= $4158

Thus, Amount to be paid = $4158 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 = $3850

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3850 + ($3850 × 4% × 2)

= $3850 + ($3850 ×⁴/₁₀₀ × 2)

= $3850 + (^{3850 × 4 × 2}/₁₀₀)

= $3850 + (^{15400 × 2}/₁₀₀)

= $3850 + (³⁰⁸⁰⁰/₁₀₀)

= $3850 + $308 = $4158

Thus, Amount (A) to be paid = $4158 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 $3850, the simple interest in 1 year

= ⁴/₁₀₀ × 3850

= ^{4 × 3850}/₁₀₀

= ¹⁵⁴⁰⁰/₁₀₀ = $154

Thus, simple interest for 1 year = $154

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $154 × 2 = $308

Thus, Simple Interest (SI) = $308

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $308

= $4158

Thus, Amount to be paid = $4158 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.

(2) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?

(3) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.

(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 10% simple interest?

(5) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.

(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?

(7) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(8) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 3 years.

(9) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?

(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.