Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 8% simple interest?

Correct Answer  $4582

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 8% × 2

= $3950 ×⁸/₁₀₀ × 2

= ^{3950 × 8 × 2}/₁₀₀

= ^{31600 × 2}/₁₀₀

= ⁶³²⁰⁰/₁₀₀

= $632

Thus, Simple Interest = $632

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 = $3950 + $632

= $4582

Thus, Amount to be paid = $4582 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 = $3950

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3950 + ($3950 × 8% × 2)

= $3950 + ($3950 ×⁸/₁₀₀ × 2)

= $3950 + (^{3950 × 8 × 2}/₁₀₀)

= $3950 + (^{31600 × 2}/₁₀₀)

= $3950 + (⁶³²⁰⁰/₁₀₀)

= $3950 + $632 = $4582

Thus, Amount (A) to be paid = $4582 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 $3950, the simple interest in 1 year

= ⁸/₁₀₀ × 3950

= ^{8 × 3950}/₁₀₀

= ³¹⁶⁰⁰/₁₀₀ = $316

Thus, simple interest for 1 year = $316

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $316 × 2 = $632

Thus, Simple Interest (SI) = $632

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $632

= $4582

Thus, Amount to be paid = $4582 Answer

Similar Questions

(1) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.

(3) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.

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

(5) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 10% simple interest?

(6) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.

(7) If Jessica paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 4 years.

(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.

(10) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.