Simple Interest
Math MCQs

Question :    Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 3 years.

Correct Answer  $4134

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 2% × 3

= $3900 ײ/₁₀₀ × 3

= ^{3900 × 2 × 3}/₁₀₀

= ^{7800 × 3}/₁₀₀

= ²³⁴⁰⁰/₁₀₀

= $234

Thus, Simple Interest = $234

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 + $234

= $4134

Thus, Amount to be paid = $4134 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) = 2%

And, Time (t) = 3 years

Thus, Amount (A)

= $3900 + ($3900 × 2% × 3)

= $3900 + ($3900 ײ/₁₀₀ × 3)

= $3900 + (^{3900 × 2 × 3}/₁₀₀)

= $3900 + (^{7800 × 3}/₁₀₀)

= $3900 + (²³⁴⁰⁰/₁₀₀)

= $3900 + $234 = $4134

Thus, Amount (A) to be paid = $4134 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 $3900, the simple interest in 1 year

= ²/₁₀₀ × 3900

= ^{2 × 3900}/₁₀₀

= ⁷⁸⁰⁰/₁₀₀ = $78

Thus, simple interest for 1 year = $78

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $78 × 3 = $234

Thus, Simple Interest (SI) = $234

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $234

= $4134

Thus, Amount to be paid = $4134 Answer

Similar Questions

(1) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 4% simple interest?

(2) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 7% simple interest.

(3) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(4) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.

(5) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.

(6) How much loan did Michelle borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7992.5 to clear it?

(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.

(8) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.

(9) Jessica had to pay $4312.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(10) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.