Simple Interest
Math MCQs

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

Correct Answer  $4060

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 4% × 4

= $3500 ×⁴/₁₀₀ × 4

= ^{3500 × 4 × 4}/₁₀₀

= ^{14000 × 4}/₁₀₀

= ⁵⁶⁰⁰⁰/₁₀₀

= $560

Thus, Simple Interest = $560

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 + $560

= $4060

Thus, Amount to be paid = $4060 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) = 4%

And, Time (t) = 4 years

Thus, Amount (A)

= $3500 + ($3500 × 4% × 4)

= $3500 + ($3500 ×⁴/₁₀₀ × 4)

= $3500 + (^{3500 × 4 × 4}/₁₀₀)

= $3500 + (^{14000 × 4}/₁₀₀)

= $3500 + (⁵⁶⁰⁰⁰/₁₀₀)

= $3500 + $560 = $4060

Thus, Amount (A) to be paid = $4060 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 $3500, the simple interest in 1 year

= ⁴/₁₀₀ × 3500

= ^{4 × 3500}/₁₀₀

= ¹⁴⁰⁰⁰/₁₀₀ = $140

Thus, simple interest for 1 year = $140

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $140 × 4 = $560

Thus, Simple Interest (SI) = $560

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $560

= $4060

Thus, Amount to be paid = $4060 Answer

Similar Questions

(1) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.

(2) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.

(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.

(4) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.

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

(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.

(7) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.

(9) If Steven paid $5520 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) In how much time a principal of $3000 will amount to $3450 at a simple interest of 5% per annum?