Simple Interest
Math MCQs

Question :    Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.

Correct Answer  $4424

Solution & Explanation

Solution

Given,

Principal (P) = $3950

Rate of Simple Interest (SI) = 4%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3950 × 4% × 3

= $3950 ×⁴/₁₀₀ × 3

= ^{3950 × 4 × 3}/₁₀₀

= ^{15800 × 3}/₁₀₀

= ⁴⁷⁴⁰⁰/₁₀₀

= $474

Thus, Simple Interest = $474

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 = $3950 + $474

= $4424

Thus, Amount to be paid = $4424 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 = $3950

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 3 years

Thus, Amount (A)

= $3950 + ($3950 × 4% × 3)

= $3950 + ($3950 ×⁴/₁₀₀ × 3)

= $3950 + (^{3950 × 4 × 3}/₁₀₀)

= $3950 + (^{15800 × 3}/₁₀₀)

= $3950 + (⁴⁷⁴⁰⁰/₁₀₀)

= $3950 + $474 = $4424

Thus, Amount (A) to be paid = $4424 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $3950, the simple interest in 1 year

= ⁴/₁₀₀ × 3950

= ^{4 × 3950}/₁₀₀

= ¹⁵⁸⁰⁰/₁₀₀ = $158

Thus, simple interest for 1 year = $158

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $158 × 3 = $474

Thus, Simple Interest (SI) = $474

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $474

= $4424

Thus, Amount to be paid = $4424 Answer

Similar Questions

(1) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 8 years.

(3) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.

(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.

(5) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?

(6) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.

(7) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6120 to clear the loan, then find the time period of the loan.

(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?

(9) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.

(10) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.