Simple Interest
Math MCQs

Question :    Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.

Correct Answer  $3996

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 2% × 4

= $3700 ײ/₁₀₀ × 4

= ^{3700 × 2 × 4}/₁₀₀

= ^{7400 × 4}/₁₀₀

= ²⁹⁶⁰⁰/₁₀₀

= $296

Thus, Simple Interest = $296

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 = $3700 + $296

= $3996

Thus, Amount to be paid = $3996 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 = $3700

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3700 + ($3700 × 2% × 4)

= $3700 + ($3700 ײ/₁₀₀ × 4)

= $3700 + (^{3700 × 2 × 4}/₁₀₀)

= $3700 + (^{7400 × 4}/₁₀₀)

= $3700 + (²⁹⁶⁰⁰/₁₀₀)

= $3700 + $296 = $3996

Thus, Amount (A) to be paid = $3996 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 $3700, the simple interest in 1 year

= ²/₁₀₀ × 3700

= ^{2 × 3700}/₁₀₀

= ⁷⁴⁰⁰/₁₀₀ = $74

Thus, simple interest for 1 year = $74

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $74 × 4 = $296

Thus, Simple Interest (SI) = $296

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $296

= $3996

Thus, Amount to be paid = $3996 Answer

Similar Questions

(1) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.

(3) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.

(4) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?

(5) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.

(6) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.

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

(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?

(9) If Joseph paid $4440 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.