Simple Interest
Math MCQs

Question :    Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.

Correct Answer  $5390

Solution & Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 10%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3850 × 10% × 4

= $3850 ×¹⁰/₁₀₀ × 4

= ^{3850 × 10 × 4}/₁₀₀

= ^{38500 × 4}/₁₀₀

= ¹⁵⁴⁰⁰⁰/₁₀₀

= $1540

Thus, Simple Interest = $1540

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 = $3850 + $1540

= $5390

Thus, Amount to be paid = $5390 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 = $3850

Rate of Simple Interest (SI) or (R) = 10%

And, Time (t) = 4 years

Thus, Amount (A)

= $3850 + ($3850 × 10% × 4)

= $3850 + ($3850 ×¹⁰/₁₀₀ × 4)

= $3850 + (^{3850 × 10 × 4}/₁₀₀)

= $3850 + (^{38500 × 4}/₁₀₀)

= $3850 + (¹⁵⁴⁰⁰⁰/₁₀₀)

= $3850 + $1540 = $5390

Thus, Amount (A) to be paid = $5390 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 10%

This, means, $10 per $100 per year

∵ For $100, the simple interest for 1 year = $10

∴ For $1, the simple interest for 1 year = ¹⁰/₁₀₀

∴ For $3850, the simple interest in 1 year

= ¹⁰/₁₀₀ × 3850

= ^{10 × 3850}/₁₀₀

= ³⁸⁵⁰⁰/₁₀₀ = $385

Thus, simple interest for 1 year = $385

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $385 × 4 = $1540

Thus, Simple Interest (SI) = $1540

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $1540

= $5390

Thus, Amount to be paid = $5390 Answer

Similar Questions

(1) 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.

(2) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.

(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 7 years.

(5) How much loan did Nancy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7687.5 to clear it?

(6) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.

(7) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.

(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?