Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?

Correct Answer  $4543

Solution & Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 9%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3850 × 9% × 2

= $3850 ×⁹/₁₀₀ × 2

= ^{3850 × 9 × 2}/₁₀₀

= ^{34650 × 2}/₁₀₀

= ⁶⁹³⁰⁰/₁₀₀

= $693

Thus, Simple Interest = $693

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 = $3850 + $693

= $4543

Thus, Amount to be paid = $4543 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 = $3850

Rate of Simple Interest (SI) or (R) = 9%

And, Time (t) = 2 years

Thus, Amount (A)

= $3850 + ($3850 × 9% × 2)

= $3850 + ($3850 ×⁹/₁₀₀ × 2)

= $3850 + (^{3850 × 9 × 2}/₁₀₀)

= $3850 + (^{34650 × 2}/₁₀₀)

= $3850 + (⁶⁹³⁰⁰/₁₀₀)

= $3850 + $693 = $4543

Thus, Amount (A) to be paid = $4543 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 9%

This, means, $9 per $100 per year

∵ For $100, the simple interest for 1 year = $9

∴ For $1, the simple interest for 1 year = ⁹/₁₀₀

∴ For $3850, the simple interest in 1 year

= ⁹/₁₀₀ × 3850

= ^{9 × 3850}/₁₀₀

= ³⁴⁶⁵⁰/₁₀₀ = $346.5

Thus, simple interest for 1 year = $346.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $346.5 × 2 = $693

Thus, Simple Interest (SI) = $693

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $693

= $4543

Thus, Amount to be paid = $4543 Answer

Similar Questions

(1) Steven had to pay $5014 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.

(3) Joshua had to pay $5635 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) How much loan did Sarah borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6727.5 to clear it?

(5) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?

(6) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.

(8) In how much time a principal of $3000 will amount to $3450 at a simple interest of 5% per annum?

(9) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.

(10) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?