Simple Interest
Math MCQs

Question :    Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.

Correct Answer  $3456

Solution & Explanation

Solution

Given,

Principal (P) = $3200

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) = $3200 × 2% × 4

= $3200 ײ/₁₀₀ × 4

= ^{3200 × 2 × 4}/₁₀₀

= ^{6400 × 4}/₁₀₀

= ²⁵⁶⁰⁰/₁₀₀

= $256

Thus, Simple Interest = $256

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 = $3200 + $256

= $3456

Thus, Amount to be paid = $3456 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 = $3200

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3200 + ($3200 × 2% × 4)

= $3200 + ($3200 ײ/₁₀₀ × 4)

= $3200 + (^{3200 × 2 × 4}/₁₀₀)

= $3200 + (^{6400 × 4}/₁₀₀)

= $3200 + (²⁵⁶⁰⁰/₁₀₀)

= $3200 + $256 = $3456

Thus, Amount (A) to be paid = $3456 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 $3200, the simple interest in 1 year

= ²/₁₀₀ × 3200

= ^{2 × 3200}/₁₀₀

= ⁶⁴⁰⁰/₁₀₀ = $64

Thus, simple interest for 1 year = $64

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $64 × 4 = $256

Thus, Simple Interest (SI) = $256

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $256

= $3456

Thus, Amount to be paid = $3456 Answer

Similar Questions

(1) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.

(2) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.

(3) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.

(5) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.

(7) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 8 years.

(9) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

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