Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?

Correct Answer  $4345

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 5% × 2

= $3950 ×⁵/₁₀₀ × 2

= ^{3950 × 5 × 2}/₁₀₀

= ^{19750 × 2}/₁₀₀

= ³⁹⁵⁰⁰/₁₀₀

= $395

Thus, Simple Interest = $395

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 = $3950 + $395

= $4345

Thus, Amount to be paid = $4345 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 = $3950

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3950 + ($3950 × 5% × 2)

= $3950 + ($3950 ×⁵/₁₀₀ × 2)

= $3950 + (^{3950 × 5 × 2}/₁₀₀)

= $3950 + (^{19750 × 2}/₁₀₀)

= $3950 + (³⁹⁵⁰⁰/₁₀₀)

= $3950 + $395 = $4345

Thus, Amount (A) to be paid = $4345 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 $3950, the simple interest in 1 year

= ⁵/₁₀₀ × 3950

= ^{5 × 3950}/₁₀₀

= ¹⁹⁷⁵⁰/₁₀₀ = $197.5

Thus, simple interest for 1 year = $197.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $197.5 × 2 = $395

Thus, Simple Interest (SI) = $395

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $395

= $4345

Thus, Amount to be paid = $4345 Answer

Similar Questions

(1) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.

(2) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?

(3) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?

(4) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.

(5) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.

(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.

(7) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?

(8) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.

(9) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 3 years.

(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 4% simple interest?