Simple Interest
Math MCQs

Question :    Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 4 years.

Correct Answer  $4292

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 4% × 4

= $3700 ×⁴/₁₀₀ × 4

= ^{3700 × 4 × 4}/₁₀₀

= ^{14800 × 4}/₁₀₀

= ⁵⁹²⁰⁰/₁₀₀

= $592

Thus, Simple Interest = $592

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 = $3700 + $592

= $4292

Thus, Amount to be paid = $4292 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 = $3700

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3700 + ($3700 × 4% × 4)

= $3700 + ($3700 ×⁴/₁₀₀ × 4)

= $3700 + (^{3700 × 4 × 4}/₁₀₀)

= $3700 + (^{14800 × 4}/₁₀₀)

= $3700 + (⁵⁹²⁰⁰/₁₀₀)

= $3700 + $592 = $4292

Thus, Amount (A) to be paid = $4292 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 $3700, the simple interest in 1 year

= ⁴/₁₀₀ × 3700

= ^{4 × 3700}/₁₀₀

= ¹⁴⁸⁰⁰/₁₀₀ = $148

Thus, simple interest for 1 year = $148

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $148 × 4 = $592

Thus, Simple Interest (SI) = $592

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $592

= $4292

Thus, Amount to be paid = $4292 Answer

Similar Questions

(1) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.

(2) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) How much loan did Jacob borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9200 to clear it?

(4) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.

(5) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.

(7) If Joshua paid $5684 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.

(9) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.

(10) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.