Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?

Correct Answer  $4389

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 7% × 2

= $3850 ×⁷/₁₀₀ × 2

= ^{3850 × 7 × 2}/₁₀₀

= ^{26950 × 2}/₁₀₀

= ⁵³⁹⁰⁰/₁₀₀

= $539

Thus, Simple Interest = $539

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 = $3850 + $539

= $4389

Thus, Amount to be paid = $4389 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 = $3850

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3850 + ($3850 × 7% × 2)

= $3850 + ($3850 ×⁷/₁₀₀ × 2)

= $3850 + (^{3850 × 7 × 2}/₁₀₀)

= $3850 + (^{26950 × 2}/₁₀₀)

= $3850 + (⁵³⁹⁰⁰/₁₀₀)

= $3850 + $539 = $4389

Thus, Amount (A) to be paid = $4389 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 $3850, the simple interest in 1 year

= ⁷/₁₀₀ × 3850

= ^{7 × 3850}/₁₀₀

= ²⁶⁹⁵⁰/₁₀₀ = $269.5

Thus, simple interest for 1 year = $269.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $269.5 × 2 = $539

Thus, Simple Interest (SI) = $539

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $539

= $4389

Thus, Amount to be paid = $4389 Answer

Similar Questions

(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?

(2) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.

(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.

(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.

(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?

(7) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(8) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

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

(10) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.