Simple Interest
Math MCQs

Question :    Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.

Correct Answer  $4424

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 3% × 4

= $3950 ׳/₁₀₀ × 4

= ^{3950 × 3 × 4}/₁₀₀

= ^{11850 × 4}/₁₀₀

= ⁴⁷⁴⁰⁰/₁₀₀

= $474

Thus, Simple Interest = $474

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 = $3950 + $474

= $4424

Thus, Amount to be paid = $4424 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 = $3950

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3950 + ($3950 × 3% × 4)

= $3950 + ($3950 ׳/₁₀₀ × 4)

= $3950 + (^{3950 × 3 × 4}/₁₀₀)

= $3950 + (^{11850 × 4}/₁₀₀)

= $3950 + (⁴⁷⁴⁰⁰/₁₀₀)

= $3950 + $474 = $4424

Thus, Amount (A) to be paid = $4424 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 $3950, the simple interest in 1 year

= ³/₁₀₀ × 3950

= ^{3 × 3950}/₁₀₀

= ¹¹⁸⁵⁰/₁₀₀ = $118.5

Thus, simple interest for 1 year = $118.5

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $118.5 × 4 = $474

Thus, Simple Interest (SI) = $474

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $474

= $4424

Thus, Amount to be paid = $4424 Answer

Similar Questions

(1) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?

(2) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.

(3) How much loan did Matthew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7130 to clear it?

(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?

(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 6% simple interest?

(6) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 5% simple interest?

(7) How much loan did Joseph borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6270 to clear it?

(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.

(9) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.

(10) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.