Simple Interest
Math MCQs

Question :    Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.

Correct Answer  $4543

Solution & Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 6%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 3

= $3850 ×⁶/₁₀₀ × 3

= ^{3850 × 6 × 3}/₁₀₀

= ^{23100 × 3}/₁₀₀

= ⁶⁹³⁰⁰/₁₀₀

= $693

Thus, Simple Interest = $693

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 + $693

= $4543

Thus, Amount to be paid = $4543 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) = 6%

And, Time (t) = 3 years

Thus, Amount (A)

= $3850 + ($3850 × 6% × 3)

= $3850 + ($3850 ×⁶/₁₀₀ × 3)

= $3850 + (^{3850 × 6 × 3}/₁₀₀)

= $3850 + (^{23100 × 3}/₁₀₀)

= $3850 + (⁶⁹³⁰⁰/₁₀₀)

= $3850 + $693 = $4543

Thus, Amount (A) to be paid = $4543 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 6%

This, means, $6 per $100 per year

∵ For $100, the simple interest for 1 year = $6

∴ For $1, the simple interest for 1 year = ⁶/₁₀₀

∴ For $3850, the simple interest in 1 year

= ⁶/₁₀₀ × 3850

= ^{6 × 3850}/₁₀₀

= ²³¹⁰⁰/₁₀₀ = $231

Thus, simple interest for 1 year = $231

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $231 × 3 = $693

Thus, Simple Interest (SI) = $693

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $693

= $4543

Thus, Amount to be paid = $4543 Answer

Similar Questions

(1) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?

(2) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.

(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 8 years.

(4) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.

(6) Christopher had to pay $4600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(7) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 8 years.

(9) How much loan did Betty borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7500 to clear it?

(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 8 years.