Simple Interest
MCQs Math


Question:     What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 5% simple interest?


Correct Answer  $4400

Solution And Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 5% × 2

= $4000 ×5/100 × 2

= 4000 × 5 × 2/100

= 20000 × 2/100

= 40000/100

= $400

Thus, Simple Interest = $400

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 + $400

= $4400

Thus, Amount to be paid = $4400 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) = 5%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 5% × 2)

= $4000 + ($4000 ×5/100 × 2)

= $4000 + (4000 × 5 × 2/100)

= $4000 + (20000 × 2/100)

= $4000 + (40000/100)

= $4000 + $400 = $4400

Thus, Amount (A) to be paid = $4400 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 $4000, the simple interest in 1 year

= 5/100 × 4000

= 5 × 4000/100

= 20000/100 = $200

Thus, simple interest for 1 year = $200

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $200 × 2 = $400

Thus, Simple Interest (SI) = $400

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $400

= $4400

Thus, Amount to be paid = $4400 Answer


Similar Questions

(1) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.

(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.

(3) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9348 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.

(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.

(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.

(7) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.

(8) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.

(9) Ashley had to pay $4959.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?


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