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) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.

(2) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.

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

(4) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.

(5) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?

(6) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.

(8) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.

(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.

(10) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.