Simple Interest
Math MCQs

Question :    Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.

Correct Answer  $4960

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 8% × 3

= $4000 ×⁸/₁₀₀ × 3

= ^{4000 × 8 × 3}/₁₀₀

= ^{32000 × 3}/₁₀₀

= ⁹⁶⁰⁰⁰/₁₀₀

= $960

Thus, Simple Interest = $960

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 = $4000 + $960

= $4960

Thus, Amount to be paid = $4960 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 = $4000

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

And, Time (t) = 3 years

Thus, Amount (A)

= $4000 + ($4000 × 8% × 3)

= $4000 + ($4000 ×⁸/₁₀₀ × 3)

= $4000 + (^{4000 × 8 × 3}/₁₀₀)

= $4000 + (^{32000 × 3}/₁₀₀)

= $4000 + (⁹⁶⁰⁰⁰/₁₀₀)

= $4000 + $960 = $4960

Thus, Amount (A) to be paid = $4960 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 $4000, the simple interest in 1 year

= ⁸/₁₀₀ × 4000

= ^{8 × 4000}/₁₀₀

= ³²⁰⁰⁰/₁₀₀ = $320

Thus, simple interest for 1 year = $320

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $320 × 3 = $960

Thus, Simple Interest (SI) = $960

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $960

= $4960

Thus, Amount to be paid = $4960 Answer

Similar Questions

(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.

(2) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(3) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?

(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.

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

(6) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?

(7) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?

(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.

(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?

(10) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.