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) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.

(2) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9512 to clear the loan, then find the time period of the loan.

(3) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.

(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?

(5) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?

(6) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.

(7) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?

(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 7 years.

(9) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 5% simple interest?

(10) If James paid $3480 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.