Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 4% simple interest?

Correct Answer  $4212

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 4% × 2

= $3900 ×⁴/₁₀₀ × 2

= ^{3900 × 4 × 2}/₁₀₀

= ^{15600 × 2}/₁₀₀

= ³¹²⁰⁰/₁₀₀

= $312

Thus, Simple Interest = $312

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 = $3900 + $312

= $4212

Thus, Amount to be paid = $4212 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 = $3900

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3900 + ($3900 × 4% × 2)

= $3900 + ($3900 ×⁴/₁₀₀ × 2)

= $3900 + (^{3900 × 4 × 2}/₁₀₀)

= $3900 + (^{15600 × 2}/₁₀₀)

= $3900 + (³¹²⁰⁰/₁₀₀)

= $3900 + $312 = $4212

Thus, Amount (A) to be paid = $4212 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 $3900, the simple interest in 1 year

= ⁴/₁₀₀ × 3900

= ^{4 × 3900}/₁₀₀

= ¹⁵⁶⁰⁰/₁₀₀ = $156

Thus, simple interest for 1 year = $156

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $156 × 2 = $312

Thus, Simple Interest (SI) = $312

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $312

= $4212

Thus, Amount to be paid = $4212 Answer

Similar Questions

(1) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 6% simple interest?

(2) How much loan did Carol borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7755 to clear it?

(3) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.

(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?

(5) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 10% simple interest?

(7) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?

(8) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 8 years.

(10) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.