Simple Interest
Math MCQs

Question :    Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.

Correct Answer  $3240

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 2%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3000 × 2% × 4

= $3000 ײ/₁₀₀ × 4

= ^{3000 × 2 × 4}/₁₀₀

= ^{6000 × 4}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀

= $240

Thus, Simple Interest = $240

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 = $3000 + $240

= $3240

Thus, Amount to be paid = $3240 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 = $3000

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 4 years

Thus, Amount (A)

= $3000 + ($3000 × 2% × 4)

= $3000 + ($3000 ײ/₁₀₀ × 4)

= $3000 + (^{3000 × 2 × 4}/₁₀₀)

= $3000 + (^{6000 × 4}/₁₀₀)

= $3000 + (²⁴⁰⁰⁰/₁₀₀)

= $3000 + $240 = $3240

Thus, Amount (A) to be paid = $3240 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $3000, the simple interest in 1 year

= ²/₁₀₀ × 3000

= ^{2 × 3000}/₁₀₀

= ⁶⁰⁰⁰/₁₀₀ = $60

Thus, simple interest for 1 year = $60

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $60 × 4 = $240

Thus, Simple Interest (SI) = $240

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $240

= $3240

Thus, Amount to be paid = $3240 Answer

Similar Questions

(1) In how much time a principal of $3150 will amount to $3276 at a simple interest of 2% per annum?

(2) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.

(3) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 4 years.

(5) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.

(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.

(9) If Ashley paid $5278 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

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