Simple Interest
Math MCQs

Question :    What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?

Correct Answer  $4898

Solution & Explanation

Solution

Given,

Principal (P) = $3950

Rate of Simple Interest (SI) = 4%

Time (t) = 6 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3950 × 4% × 6

= $3950 ×⁴/₁₀₀ × 6

= ^{3950 × 4 × 6}/₁₀₀

= ^{15800 × 6}/₁₀₀

= ⁹⁴⁸⁰⁰/₁₀₀

= $948

Thus, Simple Interest = $948

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 = $3950 + $948

= $4898

Thus, Amount to be paid = $4898 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 = $3950

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 6 years

Thus, Amount (A)

= $3950 + ($3950 × 4% × 6)

= $3950 + ($3950 ×⁴/₁₀₀ × 6)

= $3950 + (^{3950 × 4 × 6}/₁₀₀)

= $3950 + (^{15800 × 6}/₁₀₀)

= $3950 + (⁹⁴⁸⁰⁰/₁₀₀)

= $3950 + $948 = $4898

Thus, Amount (A) to be paid = $4898 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $3950, the simple interest in 1 year

= ⁴/₁₀₀ × 3950

= ^{4 × 3950}/₁₀₀

= ¹⁵⁸⁰⁰/₁₀₀ = $158

Thus, simple interest for 1 year = $158

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $158 × 6 = $948

Thus, Simple Interest (SI) = $948

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $948

= $4898

Thus, Amount to be paid = $4898 Answer

Similar Questions

(1) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.

(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 6% simple interest.

(3) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.

(5) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.

(7) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.

(9) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?

(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.