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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) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?

(2) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?

(3) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(4) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.

(5) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?

(6) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?

(7) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?

(8) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.

(9) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.

(10) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.