Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?

Correct Answer  $4292

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 8% × 2

= $3700 ×⁸/₁₀₀ × 2

= ^{3700 × 8 × 2}/₁₀₀

= ^{29600 × 2}/₁₀₀

= ⁵⁹²⁰⁰/₁₀₀

= $592

Thus, Simple Interest = $592

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 + $592

= $4292

Thus, Amount to be paid = $4292 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) = 8%

And, Time (t) = 2 years

Thus, Amount (A)

= $3700 + ($3700 × 8% × 2)

= $3700 + ($3700 ×⁸/₁₀₀ × 2)

= $3700 + (^{3700 × 8 × 2}/₁₀₀)

= $3700 + (^{29600 × 2}/₁₀₀)

= $3700 + (⁵⁹²⁰⁰/₁₀₀)

= $3700 + $592 = $4292

Thus, Amount (A) to be paid = $4292 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 $3700, the simple interest in 1 year

= ⁸/₁₀₀ × 3700

= ^{8 × 3700}/₁₀₀

= ²⁹⁶⁰⁰/₁₀₀ = $296

Thus, simple interest for 1 year = $296

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $296 × 2 = $592

Thus, Simple Interest (SI) = $592

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $592

= $4292

Thus, Amount to be paid = $4292 Answer

Similar Questions

(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?

(2) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Charles had to pay $4251 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 8 years.

(5) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?

(6) How much loan did William borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6600 to clear it?

(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?

(8) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?

(9) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.

(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 7 years.