Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 10% simple interest?

Correct Answer  $4680

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 10% × 2

= $3900 ×¹⁰/₁₀₀ × 2

= ^{3900 × 10 × 2}/₁₀₀

= ^{39000 × 2}/₁₀₀

= ⁷⁸⁰⁰⁰/₁₀₀

= $780

Thus, Simple Interest = $780

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 = $3900 + $780

= $4680

Thus, Amount to be paid = $4680 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 = $3900

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3900 + ($3900 × 10% × 2)

= $3900 + ($3900 ×¹⁰/₁₀₀ × 2)

= $3900 + (^{3900 × 10 × 2}/₁₀₀)

= $3900 + (^{39000 × 2}/₁₀₀)

= $3900 + (⁷⁸⁰⁰⁰/₁₀₀)

= $3900 + $780 = $4680

Thus, Amount (A) to be paid = $4680 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 $3900, the simple interest in 1 year

= ¹⁰/₁₀₀ × 3900

= ^{10 × 3900}/₁₀₀

= ³⁹⁰⁰⁰/₁₀₀ = $390

Thus, simple interest for 1 year = $390

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $390 × 2 = $780

Thus, Simple Interest (SI) = $780

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $780

= $4680

Thus, Amount to be paid = $4680 Answer

Similar Questions

(1) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.

(2) How much loan did Nancy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6765 to clear it?

(3) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 9% simple interest?

(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.

(5) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.

(7) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 3 years.

(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.

(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 4 years.

(10) Steven had to pay $4876 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.