Simple Interest
Math MCQs

Question :    Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 4 years.

Correct Answer  $4800

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 5% × 4

= $4000 ×⁵/₁₀₀ × 4

= ^{4000 × 5 × 4}/₁₀₀

= ^{20000 × 4}/₁₀₀

= ⁸⁰⁰⁰⁰/₁₀₀

= $800

Thus, Simple Interest = $800

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 = $4000 + $800

= $4800

Thus, Amount to be paid = $4800 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 = $4000

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

And, Time (t) = 4 years

Thus, Amount (A)

= $4000 + ($4000 × 5% × 4)

= $4000 + ($4000 ×⁵/₁₀₀ × 4)

= $4000 + (^{4000 × 5 × 4}/₁₀₀)

= $4000 + (^{20000 × 4}/₁₀₀)

= $4000 + (⁸⁰⁰⁰⁰/₁₀₀)

= $4000 + $800 = $4800

Thus, Amount (A) to be paid = $4800 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 $4000, the simple interest in 1 year

= ⁵/₁₀₀ × 4000

= ^{5 × 4000}/₁₀₀

= ²⁰⁰⁰⁰/₁₀₀ = $200

Thus, simple interest for 1 year = $200

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $200 × 4 = $800

Thus, Simple Interest (SI) = $800

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $800

= $4800

Thus, Amount to be paid = $4800 Answer

Similar Questions

(1) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.

(3) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?

(4) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?

(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.

(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 8% simple interest?

(7) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.

(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?

(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?

(10) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 to clear the loan, then find the time period of the loan.