Simple Interest
Math MCQs

Question :    What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?

Correct Answer  $3808

Solution & Explanation

Solution

Given,

Principal (P) = $3400

Rate of Simple Interest (SI) = 2%

Time (t) = 6 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3400 × 2% × 6

= $3400 ײ/₁₀₀ × 6

= ^{3400 × 2 × 6}/₁₀₀

= ^{6800 × 6}/₁₀₀

= ⁴⁰⁸⁰⁰/₁₀₀

= $408

Thus, Simple Interest = $408

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 = $3400 + $408

= $3808

Thus, Amount to be paid = $3808 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 = $3400

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 6 years

Thus, Amount (A)

= $3400 + ($3400 × 2% × 6)

= $3400 + ($3400 ײ/₁₀₀ × 6)

= $3400 + (^{3400 × 2 × 6}/₁₀₀)

= $3400 + (^{6800 × 6}/₁₀₀)

= $3400 + (⁴⁰⁸⁰⁰/₁₀₀)

= $3400 + $408 = $3808

Thus, Amount (A) to be paid = $3808 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $3400, the simple interest in 1 year

= ²/₁₀₀ × 3400

= ^{2 × 3400}/₁₀₀

= ⁶⁸⁰⁰/₁₀₀ = $68

Thus, simple interest for 1 year = $68

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $68 × 6 = $408

Thus, Simple Interest (SI) = $408

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $408

= $3808

Thus, Amount to be paid = $3808 Answer

Similar Questions

(1) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 8 years.

(3) How much loan did Andrew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7480 to clear it?

(4) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.

(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?

(7) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 10% simple interest.

(9) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.

(10) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.