Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 8% simple interest?

Correct Answer  $4640

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 8% × 2

= $4000 ×⁸/₁₀₀ × 2

= ^{4000 × 8 × 2}/₁₀₀

= ^{32000 × 2}/₁₀₀

= ⁶⁴⁰⁰⁰/₁₀₀

= $640

Thus, Simple Interest = $640

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 + $640

= $4640

Thus, Amount to be paid = $4640 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) = 8%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 8% × 2)

= $4000 + ($4000 ×⁸/₁₀₀ × 2)

= $4000 + (^{4000 × 8 × 2}/₁₀₀)

= $4000 + (^{32000 × 2}/₁₀₀)

= $4000 + (⁶⁴⁰⁰⁰/₁₀₀)

= $4000 + $640 = $4640

Thus, Amount (A) to be paid = $4640 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 $4000, the simple interest in 1 year

= ⁸/₁₀₀ × 4000

= ^{8 × 4000}/₁₀₀

= ³²⁰⁰⁰/₁₀₀ = $320

Thus, simple interest for 1 year = $320

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $320 × 2 = $640

Thus, Simple Interest (SI) = $640

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $640

= $4640

Thus, Amount to be paid = $4640 Answer

Similar Questions

(1) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.

(2) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?

(3) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.

(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?

(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?

(6) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.

(8) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.

(10) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.