Simple Interest
Math MCQs

Question :  ( 1 of 10 )  Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.

Correct Answer  $4080

Solution & Explanation

Solution

Given,

Principal (P) = $3400

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) = $3400 × 5% × 4

= $3400 ×⁵/₁₀₀ × 4

= ^{3400 × 5 × 4}/₁₀₀

= ^{17000 × 4}/₁₀₀

= ⁶⁸⁰⁰⁰/₁₀₀

= $680

Thus, Simple Interest = $680

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 = $3400 + $680

= $4080

Thus, Amount to be paid = $4080 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 = $3400

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3400 + ($3400 × 5% × 4)

= $3400 + ($3400 ×⁵/₁₀₀ × 4)

= $3400 + (^{3400 × 5 × 4}/₁₀₀)

= $3400 + (^{17000 × 4}/₁₀₀)

= $3400 + (⁶⁸⁰⁰⁰/₁₀₀)

= $3400 + $680 = $4080

Thus, Amount (A) to be paid = $4080 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 $3400, the simple interest in 1 year

= ⁵/₁₀₀ × 3400

= ^{5 × 3400}/₁₀₀

= ¹⁷⁰⁰⁰/₁₀₀ = $170

Thus, simple interest for 1 year = $170

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $170 × 4 = $680

Thus, Simple Interest (SI) = $680

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $680

= $4080

Thus, Amount to be paid = $4080 Answer

Similar Questions

(1) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.

(2) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 5% simple interest?

(3) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 6% simple interest?

(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?

(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.

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

(7) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.

(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 4 years.

(10) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.