Simple Interest
Math MCQs

Question :    What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?

Correct Answer  $4312

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 2% × 6

= $3850 ײ/₁₀₀ × 6

= ^{3850 × 2 × 6}/₁₀₀

= ^{7700 × 6}/₁₀₀

= ⁴⁶²⁰⁰/₁₀₀

= $462

Thus, Simple Interest = $462

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 + $462

= $4312

Thus, Amount to be paid = $4312 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) = 2%

And, Time (t) = 6 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 6)

= $3850 + ($3850 ײ/₁₀₀ × 6)

= $3850 + (^{3850 × 2 × 6}/₁₀₀)

= $3850 + (^{7700 × 6}/₁₀₀)

= $3850 + (⁴⁶²⁰⁰/₁₀₀)

= $3850 + $462 = $4312

Thus, Amount (A) to be paid = $4312 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 $3850, the simple interest in 1 year

= ²/₁₀₀ × 3850

= ^{2 × 3850}/₁₀₀

= ⁷⁷⁰⁰/₁₀₀ = $77

Thus, simple interest for 1 year = $77

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $77 × 6 = $462

Thus, Simple Interest (SI) = $462

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $462

= $4312

Thus, Amount to be paid = $4312 Answer

Similar Questions

(1) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 10% simple interest?

(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.

(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.

(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.

(5) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.

(6) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7599 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.

(8) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.

(9) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?

(10) If Margaret paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.