Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?

Correct Answer  $4800

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 10% × 2

= $4000 ×¹⁰/₁₀₀ × 2

= ^{4000 × 10 × 2}/₁₀₀

= ^{40000 × 2}/₁₀₀

= ⁸⁰⁰⁰⁰/₁₀₀

= $800

Thus, Simple Interest = $800

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 + $800

= $4800

Thus, Amount to be paid = $4800 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) = 10%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 10% × 2)

= $4000 + ($4000 ×¹⁰/₁₀₀ × 2)

= $4000 + (^{4000 × 10 × 2}/₁₀₀)

= $4000 + (^{40000 × 2}/₁₀₀)

= $4000 + (⁸⁰⁰⁰⁰/₁₀₀)

= $4000 + $800 = $4800

Thus, Amount (A) to be paid = $4800 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 $4000, the simple interest in 1 year

= ¹⁰/₁₀₀ × 4000

= ^{10 × 4000}/₁₀₀

= ⁴⁰⁰⁰⁰/₁₀₀ = $400

Thus, simple interest for 1 year = $400

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $400 × 2 = $800

Thus, Simple Interest (SI) = $800

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $800

= $4800

Thus, Amount to be paid = $4800 Answer

Similar Questions

(1) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.

(2) If Susan paid $4380 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.

(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.

(5) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 2% simple interest?

(6) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?

(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.

(8) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.

(9) Jessica had to pay $4200 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

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