Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 5% simple interest?

Correct Answer  $4180

Solution & Explanation

Solution

Given,

Principal (P) = $3800

Rate of Simple Interest (SI) = 5%

Time (t) = 2 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3800 × 5% × 2

= $3800 ×⁵/₁₀₀ × 2

= ^{3800 × 5 × 2}/₁₀₀

= ^{19000 × 2}/₁₀₀

= ³⁸⁰⁰⁰/₁₀₀

= $380

Thus, Simple Interest = $380

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 = $3800 + $380

= $4180

Thus, Amount to be paid = $4180 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 = $3800

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 2 years

Thus, Amount (A)

= $3800 + ($3800 × 5% × 2)

= $3800 + ($3800 ×⁵/₁₀₀ × 2)

= $3800 + (^{3800 × 5 × 2}/₁₀₀)

= $3800 + (^{19000 × 2}/₁₀₀)

= $3800 + (³⁸⁰⁰⁰/₁₀₀)

= $3800 + $380 = $4180

Thus, Amount (A) to be paid = $4180 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $3800, the simple interest in 1 year

= ⁵/₁₀₀ × 3800

= ^{5 × 3800}/₁₀₀

= ¹⁹⁰⁰⁰/₁₀₀ = $190

Thus, simple interest for 1 year = $190

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $190 × 2 = $380

Thus, Simple Interest (SI) = $380

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $380

= $4180

Thus, Amount to be paid = $4180 Answer

Similar Questions

(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?

(2) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.

(3) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.

(4) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(5) How much loan did Donna borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8562.5 to clear it?

(6) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 10% simple interest?

(7) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.

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

(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 7 years.

(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 4 years.