Simple Interest
Math MCQs

Question :    Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.

Correct Answer  $4554

Solution & Explanation

Solution

Given,

Principal (P) = $3450

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) = $3450 × 8% × 4

= $3450 ×⁸/₁₀₀ × 4

= ^{3450 × 8 × 4}/₁₀₀

= ^{27600 × 4}/₁₀₀

= ¹¹⁰⁴⁰⁰/₁₀₀

= $1104

Thus, Simple Interest = $1104

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 = $3450 + $1104

= $4554

Thus, Amount to be paid = $4554 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 = $3450

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3450 + ($3450 × 8% × 4)

= $3450 + ($3450 ×⁸/₁₀₀ × 4)

= $3450 + (^{3450 × 8 × 4}/₁₀₀)

= $3450 + (^{27600 × 4}/₁₀₀)

= $3450 + (¹¹⁰⁴⁰⁰/₁₀₀)

= $3450 + $1104 = $4554

Thus, Amount (A) to be paid = $4554 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 $3450, the simple interest in 1 year

= ⁸/₁₀₀ × 3450

= ^{8 × 3450}/₁₀₀

= ²⁷⁶⁰⁰/₁₀₀ = $276

Thus, simple interest for 1 year = $276

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $276 × 4 = $1104

Thus, Simple Interest (SI) = $1104

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $1104

= $4554

Thus, Amount to be paid = $4554 Answer

Similar Questions

(1) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) Michael had to pay $3498 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.

(4) If Mark paid $4752 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.

(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?

(8) How much loan did Deborah borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8567.5 to clear it?

(9) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.

(10) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.