Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?

Correct Answer  $4332

Solution & Explanation

Solution

Given,

Principal (P) = $3800

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) = $3800 × 7% × 2

= $3800 ×⁷/₁₀₀ × 2

= ^{3800 × 7 × 2}/₁₀₀

= ^{26600 × 2}/₁₀₀

= ⁵³²⁰⁰/₁₀₀

= $532

Thus, Simple Interest = $532

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 + $532

= $4332

Thus, Amount to be paid = $4332 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) = 7%

And, Time (t) = 2 years

Thus, Amount (A)

= $3800 + ($3800 × 7% × 2)

= $3800 + ($3800 ×⁷/₁₀₀ × 2)

= $3800 + (^{3800 × 7 × 2}/₁₀₀)

= $3800 + (^{26600 × 2}/₁₀₀)

= $3800 + (⁵³²⁰⁰/₁₀₀)

= $3800 + $532 = $4332

Thus, Amount (A) to be paid = $4332 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 $3800, the simple interest in 1 year

= ⁷/₁₀₀ × 3800

= ^{7 × 3800}/₁₀₀

= ²⁶⁶⁰⁰/₁₀₀ = $266

Thus, simple interest for 1 year = $266

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $266 × 2 = $532

Thus, Simple Interest (SI) = $532

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $532

= $4332

Thus, Amount to be paid = $4332 Answer

Similar Questions

(1) Kimberly had to pay $5068.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.

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

(4) William had to pay $3920 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?

(6) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.

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

(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.

(9) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.

(10) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?