Simple Interest
Math MCQs

Question :    Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 4 years.

Correct Answer  $3294

Solution & Explanation

Solution

Given,

Principal (P) = $3050

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) = $3050 × 2% × 4

= $3050 ײ/₁₀₀ × 4

= ^{3050 × 2 × 4}/₁₀₀

= ^{6100 × 4}/₁₀₀

= ²⁴⁴⁰⁰/₁₀₀

= $244

Thus, Simple Interest = $244

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 = $3050 + $244

= $3294

Thus, Amount to be paid = $3294 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 = $3050

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3050 + ($3050 × 2% × 4)

= $3050 + ($3050 ײ/₁₀₀ × 4)

= $3050 + (^{3050 × 2 × 4}/₁₀₀)

= $3050 + (^{6100 × 4}/₁₀₀)

= $3050 + (²⁴⁴⁰⁰/₁₀₀)

= $3050 + $244 = $3294

Thus, Amount (A) to be paid = $3294 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 $3050, the simple interest in 1 year

= ²/₁₀₀ × 3050

= ^{2 × 3050}/₁₀₀

= ⁶¹⁰⁰/₁₀₀ = $61

Thus, simple interest for 1 year = $61

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $61 × 4 = $244

Thus, Simple Interest (SI) = $244

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3050 + $244

= $3294

Thus, Amount to be paid = $3294 Answer

Similar Questions

(1) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?

(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 8% simple interest.

(3) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.

(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 8 years.

(5) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.

(7) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.

(8) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 3 years.

(10) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?