Simple Interest
Math MCQs

Question :  ( 1 of 10 )  What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?

Correct Answer  $4560

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 7% × 2

= $4000 ×⁷/₁₀₀ × 2

= ^{4000 × 7 × 2}/₁₀₀

= ^{28000 × 2}/₁₀₀

= ⁵⁶⁰⁰⁰/₁₀₀

= $560

Thus, Simple Interest = $560

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 + $560

= $4560

Thus, Amount to be paid = $4560 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) = 7%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 7% × 2)

= $4000 + ($4000 ×⁷/₁₀₀ × 2)

= $4000 + (^{4000 × 7 × 2}/₁₀₀)

= $4000 + (^{28000 × 2}/₁₀₀)

= $4000 + (⁵⁶⁰⁰⁰/₁₀₀)

= $4000 + $560 = $4560

Thus, Amount (A) to be paid = $4560 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 $4000, the simple interest in 1 year

= ⁷/₁₀₀ × 4000

= ^{7 × 4000}/₁₀₀

= ²⁸⁰⁰⁰/₁₀₀ = $280

Thus, simple interest for 1 year = $280

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $280 × 2 = $560

Thus, Simple Interest (SI) = $560

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $560

= $4560

Thus, Amount to be paid = $4560 Answer

Similar Questions

(1) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?

(2) What amount does John have to pay after 5 years if he takes a loan of $3200 at 9% simple interest?

(3) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?

(4) If James paid $3480 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(5) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.

(6) Patricia had to pay $3339 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) In how much time a principal of $3050 will amount to $3660 at a simple interest of 5% per annum?

(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?

(9) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.

(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11800 to clear the loan, then find the time period of the loan.