Simple Interest
Math MCQs

Question :    Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 3 years.

Correct Answer  $4898

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 8% × 3

= $3950 ×⁸/₁₀₀ × 3

= ^{3950 × 8 × 3}/₁₀₀

= ^{31600 × 3}/₁₀₀

= ⁹⁴⁸⁰⁰/₁₀₀

= $948

Thus, Simple Interest = $948

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 + $948

= $4898

Thus, Amount to be paid = $4898 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) = 8%

And, Time (t) = 3 years

Thus, Amount (A)

= $3950 + ($3950 × 8% × 3)

= $3950 + ($3950 ×⁸/₁₀₀ × 3)

= $3950 + (^{3950 × 8 × 3}/₁₀₀)

= $3950 + (^{31600 × 3}/₁₀₀)

= $3950 + (⁹⁴⁸⁰⁰/₁₀₀)

= $3950 + $948 = $4898

Thus, Amount (A) to be paid = $4898 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 $3950, the simple interest in 1 year

= ⁸/₁₀₀ × 3950

= ^{8 × 3950}/₁₀₀

= ³¹⁶⁰⁰/₁₀₀ = $316

Thus, simple interest for 1 year = $316

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $316 × 3 = $948

Thus, Simple Interest (SI) = $948

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $948

= $4898

Thus, Amount to be paid = $4898 Answer

Similar Questions

(1) Calculate the amount due if Robert borrowed a sum of $3100 at 3% simple interest for 3 years.

(2) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.

(3) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?

(4) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(5) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?

(6) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?

(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?

(8) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 4 years.

(9) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.

(10) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?