Simple Interest
Math MCQs

Question :    What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?

Correct Answer  $4480

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 2% × 6

= $4000 ײ/₁₀₀ × 6

= ^{4000 × 2 × 6}/₁₀₀

= ^{8000 × 6}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀

= $480

Thus, Simple Interest = $480

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 + $480

= $4480

Thus, Amount to be paid = $4480 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) = 2%

And, Time (t) = 6 years

Thus, Amount (A)

= $4000 + ($4000 × 2% × 6)

= $4000 + ($4000 ײ/₁₀₀ × 6)

= $4000 + (^{4000 × 2 × 6}/₁₀₀)

= $4000 + (^{8000 × 6}/₁₀₀)

= $4000 + (⁴⁸⁰⁰⁰/₁₀₀)

= $4000 + $480 = $4480

Thus, Amount (A) to be paid = $4480 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 $4000, the simple interest in 1 year

= ²/₁₀₀ × 4000

= ^{2 × 4000}/₁₀₀

= ⁸⁰⁰⁰/₁₀₀ = $80

Thus, simple interest for 1 year = $80

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $80 × 6 = $480

Thus, Simple Interest (SI) = $480

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $480

= $4480

Thus, Amount to be paid = $4480 Answer

Similar Questions

(1) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.

(3) If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?

(5) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?

(6) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?

(7) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 4 years.

(8) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.

(9) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 6% simple interest.