Simple Interest
Math MCQs

Question :    Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.

Correct Answer  $3864

Solution & Explanation

Solution

Given,

Principal (P) = $3450

Rate of Simple Interest (SI) = 3%

Time (t) = 4 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3450 × 3% × 4

= $3450 ׳/₁₀₀ × 4

= ^{3450 × 3 × 4}/₁₀₀

= ^{10350 × 4}/₁₀₀

= ⁴¹⁴⁰⁰/₁₀₀

= $414

Thus, Simple Interest = $414

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 = $3450 + $414

= $3864

Thus, Amount to be paid = $3864 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 = $3450

Rate of Simple Interest (SI) or (R) = 3%

And, Time (t) = 4 years

Thus, Amount (A)

= $3450 + ($3450 × 3% × 4)

= $3450 + ($3450 ׳/₁₀₀ × 4)

= $3450 + (^{3450 × 3 × 4}/₁₀₀)

= $3450 + (^{10350 × 4}/₁₀₀)

= $3450 + (⁴¹⁴⁰⁰/₁₀₀)

= $3450 + $414 = $3864

Thus, Amount (A) to be paid = $3864 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = ³/₁₀₀

∴ For $3450, the simple interest in 1 year

= ³/₁₀₀ × 3450

= ^{3 × 3450}/₁₀₀

= ¹⁰³⁵⁰/₁₀₀ = $103.5

Thus, simple interest for 1 year = $103.5

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $103.5 × 4 = $414

Thus, Simple Interest (SI) = $414

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $414

= $3864

Thus, Amount to be paid = $3864 Answer

Similar Questions

(1) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.

(2) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.

(3) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.

(4) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.

(6) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?

(7) William had to pay $4025 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.

(9) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?

(10) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.