Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?

Correct Answer  $4218

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 7% × 2

= $3700 ×⁷/₁₀₀ × 2

= ^{3700 × 7 × 2}/₁₀₀

= ^{25900 × 2}/₁₀₀

= ⁵¹⁸⁰⁰/₁₀₀

= $518

Thus, Simple Interest = $518

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 = $3700 + $518

= $4218

Thus, Amount to be paid = $4218 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 = $3700

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3700 + ($3700 × 7% × 2)

= $3700 + ($3700 ×⁷/₁₀₀ × 2)

= $3700 + (^{3700 × 7 × 2}/₁₀₀)

= $3700 + (^{25900 × 2}/₁₀₀)

= $3700 + (⁵¹⁸⁰⁰/₁₀₀)

= $3700 + $518 = $4218

Thus, Amount (A) to be paid = $4218 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 $3700, the simple interest in 1 year

= ⁷/₁₀₀ × 3700

= ^{7 × 3700}/₁₀₀

= ²⁵⁹⁰⁰/₁₀₀ = $259

Thus, simple interest for 1 year = $259

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $259 × 2 = $518

Thus, Simple Interest (SI) = $518

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $518

= $4218

Thus, Amount to be paid = $4218 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.

(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 3 years.

(3) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.

(4) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.

(5) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?

(6) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.

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

(8) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6888 to clear the loan, then find the time period of the loan.

(9) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11584 to clear the loan, then find the time period of the loan.

(10) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 4% simple interest?