Simple Interest
Math MCQs

Question :    Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.

Correct Answer  $3538

Solution & Explanation

Solution

Given,

Principal (P) = $3050

Rate of Simple Interest (SI) = 4%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3050 × 4% × 4

= $3050 ×⁴/₁₀₀ × 4

= ^{3050 × 4 × 4}/₁₀₀

= ^{12200 × 4}/₁₀₀

= ⁴⁸⁸⁰⁰/₁₀₀

= $488

Thus, Simple Interest = $488

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 = $3050 + $488

= $3538

Thus, Amount to be paid = $3538 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 = $3050

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 4 years

Thus, Amount (A)

= $3050 + ($3050 × 4% × 4)

= $3050 + ($3050 ×⁴/₁₀₀ × 4)

= $3050 + (^{3050 × 4 × 4}/₁₀₀)

= $3050 + (^{12200 × 4}/₁₀₀)

= $3050 + (⁴⁸⁸⁰⁰/₁₀₀)

= $3050 + $488 = $3538

Thus, Amount (A) to be paid = $3538 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $3050, the simple interest in 1 year

= ⁴/₁₀₀ × 3050

= ^{4 × 3050}/₁₀₀

= ¹²²⁰⁰/₁₀₀ = $122

Thus, simple interest for 1 year = $122

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $122 × 4 = $488

Thus, Simple Interest (SI) = $488

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3050 + $488

= $3538

Thus, Amount to be paid = $3538 Answer

Similar Questions

(1) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.

(2) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.

(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?

(4) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?

(6) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.

(7) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(8) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?

(9) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.