Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?

Correct Answer  $3480

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 8%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3000 × 8% × 2

= $3000 ×⁸/₁₀₀ × 2

= ^{3000 × 8 × 2}/₁₀₀

= ^{24000 × 2}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀

= $480

Thus, Simple Interest = $480

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 = $3000 + $480

= $3480

Thus, Amount to be paid = $3480 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 = $3000

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 2 years

Thus, Amount (A)

= $3000 + ($3000 × 8% × 2)

= $3000 + ($3000 ×⁸/₁₀₀ × 2)

= $3000 + (^{3000 × 8 × 2}/₁₀₀)

= $3000 + (^{24000 × 2}/₁₀₀)

= $3000 + (⁴⁸⁰⁰⁰/₁₀₀)

= $3000 + $480 = $3480

Thus, Amount (A) to be paid = $3480 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $3000, the simple interest in 1 year

= ⁸/₁₀₀ × 3000

= ^{8 × 3000}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀ = $240

Thus, simple interest for 1 year = $240

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $240 × 2 = $480

Thus, Simple Interest (SI) = $480

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $480

= $3480

Thus, Amount to be paid = $3480 Answer

Similar Questions

(1) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.

(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.

(4) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.

(5) 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.

(6) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?

(7) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.

(8) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(9) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.

(10) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.