Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?

Correct Answer  $4560

Solution & Explanation

Solution

Given,

Principal (P) = $3800

Rate of Simple Interest (SI) = 10%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3800 × 10% × 2

= $3800 ×¹⁰/₁₀₀ × 2

= ^{3800 × 10 × 2}/₁₀₀

= ^{38000 × 2}/₁₀₀

= ⁷⁶⁰⁰⁰/₁₀₀

= $760

Thus, Simple Interest = $760

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 = $3800 + $760

= $4560

Thus, Amount to be paid = $4560 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 = $3800

Rate of Simple Interest (SI) or (R) = 10%

And, Time (t) = 2 years

Thus, Amount (A)

= $3800 + ($3800 × 10% × 2)

= $3800 + ($3800 ×¹⁰/₁₀₀ × 2)

= $3800 + (^{3800 × 10 × 2}/₁₀₀)

= $3800 + (^{38000 × 2}/₁₀₀)

= $3800 + (⁷⁶⁰⁰⁰/₁₀₀)

= $3800 + $760 = $4560

Thus, Amount (A) to be paid = $4560 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 10%

This, means, $10 per $100 per year

∵ For $100, the simple interest for 1 year = $10

∴ For $1, the simple interest for 1 year = ¹⁰/₁₀₀

∴ For $3800, the simple interest in 1 year

= ¹⁰/₁₀₀ × 3800

= ^{10 × 3800}/₁₀₀

= ³⁸⁰⁰⁰/₁₀₀ = $380

Thus, simple interest for 1 year = $380

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $380 × 2 = $760

Thus, Simple Interest (SI) = $760

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $760

= $4560

Thus, Amount to be paid = $4560 Answer

Similar Questions

(1) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 7 years.

(2) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.

(3) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(4) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.

(5) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.

(6) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?

(7) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.

(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.

(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?

(10) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?