Simple Interest
Math MCQs

Question :    Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 4 years.

Correct Answer  $4104

Solution & Explanation

Solution

Given,

Principal (P) = $3800

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) = $3800 × 2% × 4

= $3800 ײ/₁₀₀ × 4

= ^{3800 × 2 × 4}/₁₀₀

= ^{7600 × 4}/₁₀₀

= ³⁰⁴⁰⁰/₁₀₀

= $304

Thus, Simple Interest = $304

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 = $3800 + $304

= $4104

Thus, Amount to be paid = $4104 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 = $3800

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3800 + ($3800 × 2% × 4)

= $3800 + ($3800 ײ/₁₀₀ × 4)

= $3800 + (^{3800 × 2 × 4}/₁₀₀)

= $3800 + (^{7600 × 4}/₁₀₀)

= $3800 + (³⁰⁴⁰⁰/₁₀₀)

= $3800 + $304 = $4104

Thus, Amount (A) to be paid = $4104 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 $3800, the simple interest in 1 year

= ²/₁₀₀ × 3800

= ^{2 × 3800}/₁₀₀

= ⁷⁶⁰⁰/₁₀₀ = $76

Thus, simple interest for 1 year = $76

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $76 × 4 = $304

Thus, Simple Interest (SI) = $304

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $304

= $4104

Thus, Amount to be paid = $4104 Answer

Similar Questions

(1) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?

(2) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?

(3) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.

(4) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(5) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?

(6) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.

(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.

(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.

(9) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.

(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.