Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?

Correct Answer  $3876

Solution & Explanation

Solution

Given,

Principal (P) = $3400

Rate of Simple Interest (SI) = 7%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3400 × 7% × 2

= $3400 ×⁷/₁₀₀ × 2

= ^{3400 × 7 × 2}/₁₀₀

= ^{23800 × 2}/₁₀₀

= ⁴⁷⁶⁰⁰/₁₀₀

= $476

Thus, Simple Interest = $476

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 = $3400 + $476

= $3876

Thus, Amount to be paid = $3876 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 = $3400

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 2 years

Thus, Amount (A)

= $3400 + ($3400 × 7% × 2)

= $3400 + ($3400 ×⁷/₁₀₀ × 2)

= $3400 + (^{3400 × 7 × 2}/₁₀₀)

= $3400 + (^{23800 × 2}/₁₀₀)

= $3400 + (⁴⁷⁶⁰⁰/₁₀₀)

= $3400 + $476 = $3876

Thus, Amount (A) to be paid = $3876 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = ⁷/₁₀₀

∴ For $3400, the simple interest in 1 year

= ⁷/₁₀₀ × 3400

= ^{7 × 3400}/₁₀₀

= ²³⁸⁰⁰/₁₀₀ = $238

Thus, simple interest for 1 year = $238

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $238 × 2 = $476

Thus, Simple Interest (SI) = $476

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $476

= $3876

Thus, Amount to be paid = $3876 Answer

Similar Questions

(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.

(2) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?

(3) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) If Kenneth paid $5800 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(5) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?

(6) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.

(7) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?

(8) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?

(9) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.

(10) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.