Simple Interest
Math MCQs

Question :    Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.

Correct Answer  $4081

Solution & Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 2%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 3

= $3850 ײ/₁₀₀ × 3

= ^{3850 × 2 × 3}/₁₀₀

= ^{7700 × 3}/₁₀₀

= ²³¹⁰⁰/₁₀₀

= $231

Thus, Simple Interest = $231

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 + $231

= $4081

Thus, Amount to be paid = $4081 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) = 2%

And, Time (t) = 3 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 3)

= $3850 + ($3850 ײ/₁₀₀ × 3)

= $3850 + (^{3850 × 2 × 3}/₁₀₀)

= $3850 + (^{7700 × 3}/₁₀₀)

= $3850 + (²³¹⁰⁰/₁₀₀)

= $3850 + $231 = $4081

Thus, Amount (A) to be paid = $4081 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $3850, the simple interest in 1 year

= ²/₁₀₀ × 3850

= ^{2 × 3850}/₁₀₀

= ⁷⁷⁰⁰/₁₀₀ = $77

Thus, simple interest for 1 year = $77

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $77 × 3 = $231

Thus, Simple Interest (SI) = $231

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $231

= $4081

Thus, Amount to be paid = $4081 Answer

Similar Questions

(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 5% simple interest?

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.

(3) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.

(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.

(7) Daniel had to pay $4346 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7310 to clear the loan, then find the time period of the loan.

(9) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?

(10) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.