Simple Interest
Math MCQs

Question :    Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.

Correct Answer  $4160

Solution & Explanation

Solution

Given,

Principal (P) = $3250

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) = $3250 × 7% × 4

= $3250 ×⁷/₁₀₀ × 4

= ^{3250 × 7 × 4}/₁₀₀

= ^{22750 × 4}/₁₀₀

= ⁹¹⁰⁰⁰/₁₀₀

= $910

Thus, Simple Interest = $910

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 = $3250 + $910

= $4160

Thus, Amount to be paid = $4160 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 = $3250

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3250 + ($3250 × 7% × 4)

= $3250 + ($3250 ×⁷/₁₀₀ × 4)

= $3250 + (^{3250 × 7 × 4}/₁₀₀)

= $3250 + (^{22750 × 4}/₁₀₀)

= $3250 + (⁹¹⁰⁰⁰/₁₀₀)

= $3250 + $910 = $4160

Thus, Amount (A) to be paid = $4160 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 $3250, the simple interest in 1 year

= ⁷/₁₀₀ × 3250

= ^{7 × 3250}/₁₀₀

= ²²⁷⁵⁰/₁₀₀ = $227.5

Thus, simple interest for 1 year = $227.5

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $227.5 × 4 = $910

Thus, Simple Interest (SI) = $910

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3250 + $910

= $4160

Thus, Amount to be paid = $4160 Answer

Similar Questions

(1) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(2) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(3) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 3 years.

(4) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?

(5) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?

(6) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.

(8) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7872 to clear the loan, then find the time period of the loan.

(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.