Simple Interest
Math MCQs

Question :    Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.

Correct Answer  $4740

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 5% × 4

= $3950 ×⁵/₁₀₀ × 4

= ^{3950 × 5 × 4}/₁₀₀

= ^{19750 × 4}/₁₀₀

= ⁷⁹⁰⁰⁰/₁₀₀

= $790

Thus, Simple Interest = $790

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 = $3950 + $790

= $4740

Thus, Amount to be paid = $4740 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 = $3950

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3950 + ($3950 × 5% × 4)

= $3950 + ($3950 ×⁵/₁₀₀ × 4)

= $3950 + (^{3950 × 5 × 4}/₁₀₀)

= $3950 + (^{19750 × 4}/₁₀₀)

= $3950 + (⁷⁹⁰⁰⁰/₁₀₀)

= $3950 + $790 = $4740

Thus, Amount (A) to be paid = $4740 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 $3950, the simple interest in 1 year

= ⁵/₁₀₀ × 3950

= ^{5 × 3950}/₁₀₀

= ¹⁹⁷⁵⁰/₁₀₀ = $197.5

Thus, simple interest for 1 year = $197.5

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $197.5 × 4 = $790

Thus, Simple Interest (SI) = $790

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $790

= $4740

Thus, Amount to be paid = $4740 Answer

Similar Questions

(1) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(2) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 6% simple interest?

(3) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?

(4) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?

(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.

(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.

(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.

(8) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?

(9) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.

(10) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?