Simple Interest
Math MCQs

Question :    Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.

Correct Answer  $3960

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 8%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3000 × 8% × 4

= $3000 ×⁸/₁₀₀ × 4

= ^{3000 × 8 × 4}/₁₀₀

= ^{24000 × 4}/₁₀₀

= ⁹⁶⁰⁰⁰/₁₀₀

= $960

Thus, Simple Interest = $960

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 = $3000 + $960

= $3960

Thus, Amount to be paid = $3960 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 = $3000

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 4 years

Thus, Amount (A)

= $3000 + ($3000 × 8% × 4)

= $3000 + ($3000 ×⁸/₁₀₀ × 4)

= $3000 + (^{3000 × 8 × 4}/₁₀₀)

= $3000 + (^{24000 × 4}/₁₀₀)

= $3000 + (⁹⁶⁰⁰⁰/₁₀₀)

= $3000 + $960 = $3960

Thus, Amount (A) to be paid = $3960 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $3000, the simple interest in 1 year

= ⁸/₁₀₀ × 3000

= ^{8 × 3000}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀ = $240

Thus, simple interest for 1 year = $240

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $240 × 4 = $960

Thus, Simple Interest (SI) = $960

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $960

= $3960

Thus, Amount to be paid = $3960 Answer

Similar Questions

(1) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?

(2) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.

(3) Jessica had to pay $3975 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) Sandra had to pay $4984 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(6) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?

(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.

(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5960 to clear the loan, then find the time period of the loan.

(9) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.

(10) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.