Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?

Correct Answer  $4480

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (SI) = 6%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $4000 × 6% × 2

= $4000 ×⁶/₁₀₀ × 2

= ^{4000 × 6 × 2}/₁₀₀

= ^{24000 × 2}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀

= $480

Thus, Simple Interest = $480

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 = $4000 + $480

= $4480

Thus, Amount to be paid = $4480 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 = $4000

Rate of Simple Interest (SI) or (R) = 6%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 6% × 2)

= $4000 + ($4000 ×⁶/₁₀₀ × 2)

= $4000 + (^{4000 × 6 × 2}/₁₀₀)

= $4000 + (^{24000 × 2}/₁₀₀)

= $4000 + (⁴⁸⁰⁰⁰/₁₀₀)

= $4000 + $480 = $4480

Thus, Amount (A) to be paid = $4480 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 6%

This, means, $6 per $100 per year

∵ For $100, the simple interest for 1 year = $6

∴ For $1, the simple interest for 1 year = ⁶/₁₀₀

∴ For $4000, the simple interest in 1 year

= ⁶/₁₀₀ × 4000

= ^{6 × 4000}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀ = $240

Thus, simple interest for 1 year = $240

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $240 × 2 = $480

Thus, Simple Interest (SI) = $480

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $480

= $4480

Thus, Amount to be paid = $4480 Answer

Similar Questions

(1) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?

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

(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.

(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.

(5) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.

(6) If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?

(8) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 8 years.

(9) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?

(10) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.