Simple Interest
Math MCQs

Question :    Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.

Correct Answer  $3600

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 5%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3000 × 5% × 4

= $3000 ×⁵/₁₀₀ × 4

= ^{3000 × 5 × 4}/₁₀₀

= ^{15000 × 4}/₁₀₀

= ⁶⁰⁰⁰⁰/₁₀₀

= $600

Thus, Simple Interest = $600

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 = $3000 + $600

= $3600

Thus, Amount to be paid = $3600 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 = $3000

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 4 years

Thus, Amount (A)

= $3000 + ($3000 × 5% × 4)

= $3000 + ($3000 ×⁵/₁₀₀ × 4)

= $3000 + (^{3000 × 5 × 4}/₁₀₀)

= $3000 + (^{15000 × 4}/₁₀₀)

= $3000 + (⁶⁰⁰⁰⁰/₁₀₀)

= $3000 + $600 = $3600

Thus, Amount (A) to be paid = $3600 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $3000, the simple interest in 1 year

= ⁵/₁₀₀ × 3000

= ^{5 × 3000}/₁₀₀

= ¹⁵⁰⁰⁰/₁₀₀ = $150

Thus, simple interest for 1 year = $150

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $150 × 4 = $600

Thus, Simple Interest (SI) = $600

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $600

= $3600

Thus, Amount to be paid = $3600 Answer

Similar Questions

(1) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?

(2) Andrew had to pay $5376 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(3) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?

(4) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?

(5) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $8869 to clear the loan, then find the time period of the loan.

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

(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.

(8) In how much time a principal of $3200 will amount to $3680 at a simple interest of 5% per annum?

(9) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.