Simple Interest
Math MCQs

Question :    Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.

Correct Answer  $3920

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 3% × 4

= $3500 ׳/₁₀₀ × 4

= ^{3500 × 3 × 4}/₁₀₀

= ^{10500 × 4}/₁₀₀

= ⁴²⁰⁰⁰/₁₀₀

= $420

Thus, Simple Interest = $420

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 = $3500 + $420

= $3920

Thus, Amount to be paid = $3920 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 = $3500

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3500 + ($3500 × 3% × 4)

= $3500 + ($3500 ׳/₁₀₀ × 4)

= $3500 + (^{3500 × 3 × 4}/₁₀₀)

= $3500 + (^{10500 × 4}/₁₀₀)

= $3500 + (⁴²⁰⁰⁰/₁₀₀)

= $3500 + $420 = $3920

Thus, Amount (A) to be paid = $3920 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 $3500, the simple interest in 1 year

= ³/₁₀₀ × 3500

= ^{3 × 3500}/₁₀₀

= ¹⁰⁵⁰⁰/₁₀₀ = $105

Thus, simple interest for 1 year = $105

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $105 × 4 = $420

Thus, Simple Interest (SI) = $420

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $420

= $3920

Thus, Amount to be paid = $3920 Answer

Similar Questions

(1) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7647.5 to clear it?

(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.

(3) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

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

(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.

(6) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?

(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?

(8) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.

(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 3 years.

(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?