Simple Interest
Math MCQs

Question :    Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.

Correct Answer  $4158

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 2% × 4

= $3850 ײ/₁₀₀ × 4

= ^{3850 × 2 × 4}/₁₀₀

= ^{7700 × 4}/₁₀₀

= ³⁰⁸⁰⁰/₁₀₀

= $308

Thus, Simple Interest = $308

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 = $3850 + $308

= $4158

Thus, Amount to be paid = $4158 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 = $3850

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 4)

= $3850 + ($3850 ײ/₁₀₀ × 4)

= $3850 + (^{3850 × 2 × 4}/₁₀₀)

= $3850 + (^{7700 × 4}/₁₀₀)

= $3850 + (³⁰⁸⁰⁰/₁₀₀)

= $3850 + $308 = $4158

Thus, Amount (A) to be paid = $4158 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 $3850, the simple interest in 1 year

= ²/₁₀₀ × 3850

= ^{2 × 3850}/₁₀₀

= ⁷⁷⁰⁰/₁₀₀ = $77

Thus, simple interest for 1 year = $77

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $77 × 4 = $308

Thus, Simple Interest (SI) = $308

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $308

= $4158

Thus, Amount to be paid = $4158 Answer

Similar Questions

(1) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(2) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 9% simple interest?

(3) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.

(4) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 7 years.

(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.

(7) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?

(8) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(10) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.