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) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.

(2) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?

(3) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?

(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.

(5) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?

(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.

(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.

(9) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?

(10) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.