Simple Interest
MCQs Math


Question:     What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 5% simple interest?


Correct Answer  $4125

Solution And Explanation

Solution

Given,

Principal (P) = $3750

Rate of Simple Interest (SI) = 5%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3750 × 5% × 2

= $3750 ×5/100 × 2

= 3750 × 5 × 2/100

= 18750 × 2/100

= 37500/100

= $375

Thus, Simple Interest = $375

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 = $3750 + $375

= $4125

Thus, Amount to be paid = $4125 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 = $3750

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 2 years

Thus, Amount (A)

= $3750 + ($3750 × 5% × 2)

= $3750 + ($3750 ×5/100 × 2)

= $3750 + (3750 × 5 × 2/100)

= $3750 + (18750 × 2/100)

= $3750 + (37500/100)

= $3750 + $375 = $4125

Thus, Amount (A) to be paid = $4125 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = 5/100

∴ For $3750, the simple interest in 1 year

= 5/100 × 3750

= 5 × 3750/100

= 18750/100 = $187.5

Thus, simple interest for 1 year = $187.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $187.5 × 2 = $375

Thus, Simple Interest (SI) = $375

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3750 + $375

= $4125

Thus, Amount to be paid = $4125 Answer


Similar Questions

(1) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.

(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 4 years.

(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?

(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?

(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.

(6) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?

(7) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 7 years.

(9) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 8 years.

(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.


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