Simple Interest
Math MCQs

Question :    Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.

Correct Answer  $5440

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (SI) = 9%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 4

= $4000 ×⁹/₁₀₀ × 4

= ^{4000 × 9 × 4}/₁₀₀

= ^{36000 × 4}/₁₀₀

= ¹⁴⁴⁰⁰⁰/₁₀₀

= $1440

Thus, Simple Interest = $1440

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 + $1440

= $5440

Thus, Amount to be paid = $5440 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) = 9%

And, Time (t) = 4 years

Thus, Amount (A)

= $4000 + ($4000 × 9% × 4)

= $4000 + ($4000 ×⁹/₁₀₀ × 4)

= $4000 + (^{4000 × 9 × 4}/₁₀₀)

= $4000 + (^{36000 × 4}/₁₀₀)

= $4000 + (¹⁴⁴⁰⁰⁰/₁₀₀)

= $4000 + $1440 = $5440

Thus, Amount (A) to be paid = $5440 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 9%

This, means, $9 per $100 per year

∵ For $100, the simple interest for 1 year = $9

∴ For $1, the simple interest for 1 year = ⁹/₁₀₀

∴ For $4000, the simple interest in 1 year

= ⁹/₁₀₀ × 4000

= ^{9 × 4000}/₁₀₀

= ³⁶⁰⁰⁰/₁₀₀ = $360

Thus, simple interest for 1 year = $360

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $360 × 4 = $1440

Thus, Simple Interest (SI) = $1440

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $1440

= $5440

Thus, Amount to be paid = $5440 Answer

Similar Questions

(1) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.

(2) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 8% simple interest?

(3) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.

(5) In how much time a principal of $3050 will amount to $3294 at a simple interest of 2% per annum?

(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?

(7) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?

(8) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.

(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?

(10) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.