Simple Interest
Math MCQs

Question :    Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 3 years.

Correct Answer  $4340

Solution & Explanation

Solution

Given,

Principal (P) = $3500

Rate of Simple Interest (SI) = 8%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3500 × 8% × 3

= $3500 ×⁸/₁₀₀ × 3

= ^{3500 × 8 × 3}/₁₀₀

= ^{28000 × 3}/₁₀₀

= ⁸⁴⁰⁰⁰/₁₀₀

= $840

Thus, Simple Interest = $840

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 = $3500 + $840

= $4340

Thus, Amount to be paid = $4340 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 = $3500

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 3 years

Thus, Amount (A)

= $3500 + ($3500 × 8% × 3)

= $3500 + ($3500 ×⁸/₁₀₀ × 3)

= $3500 + (^{3500 × 8 × 3}/₁₀₀)

= $3500 + (^{28000 × 3}/₁₀₀)

= $3500 + (⁸⁴⁰⁰⁰/₁₀₀)

= $3500 + $840 = $4340

Thus, Amount (A) to be paid = $4340 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $3500, the simple interest in 1 year

= ⁸/₁₀₀ × 3500

= ^{8 × 3500}/₁₀₀

= ²⁸⁰⁰⁰/₁₀₀ = $280

Thus, simple interest for 1 year = $280

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $280 × 3 = $840

Thus, Simple Interest (SI) = $840

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $840

= $4340

Thus, Amount to be paid = $4340 Answer

Similar Questions

(1) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.

(2) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?

(3) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?

(4) In how much time a principal of $3100 will amount to $3596 at a simple interest of 4% per annum?

(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.

(6) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?

(7) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 8 years.

(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.

(10) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.