Simple Interest
Math MCQs

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

Correct Answer  $4096

Solution & Explanation

Solution

Given,

Principal (P) = $3200

Rate of Simple Interest (SI) = 7%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3200 × 7% × 4

= $3200 ×⁷/₁₀₀ × 4

= ^{3200 × 7 × 4}/₁₀₀

= ^{22400 × 4}/₁₀₀

= ⁸⁹⁶⁰⁰/₁₀₀

= $896

Thus, Simple Interest = $896

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 = $3200 + $896

= $4096

Thus, Amount to be paid = $4096 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 = $3200

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 4 years

Thus, Amount (A)

= $3200 + ($3200 × 7% × 4)

= $3200 + ($3200 ×⁷/₁₀₀ × 4)

= $3200 + (^{3200 × 7 × 4}/₁₀₀)

= $3200 + (^{22400 × 4}/₁₀₀)

= $3200 + (⁸⁹⁶⁰⁰/₁₀₀)

= $3200 + $896 = $4096

Thus, Amount (A) to be paid = $4096 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = ⁷/₁₀₀

∴ For $3200, the simple interest in 1 year

= ⁷/₁₀₀ × 3200

= ^{7 × 3200}/₁₀₀

= ²²⁴⁰⁰/₁₀₀ = $224

Thus, simple interest for 1 year = $224

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $224 × 4 = $896

Thus, Simple Interest (SI) = $896

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $896

= $4096

Thus, Amount to be paid = $4096 Answer

Similar Questions

(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?

(2) How much loan did Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?

(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 3 years.

(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 7 years.

(5) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.

(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?

(7) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?

(8) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.

(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 8 years.

(10) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.