Simple Interest
MCQs Math


Question:     Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.


Correct Answer  $4658.5

Solution And Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 7%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3

= $3850 ×7/100 × 3

= 3850 × 7 × 3/100

= 26950 × 3/100

= 80850/100

= $808.5

Thus, Simple Interest = $808.5

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 + $808.5

= $4658.5

Thus, Amount to be paid = $4658.5 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) = 7%

And, Time (t) = 3 years

Thus, Amount (A)

= $3850 + ($3850 × 7% × 3)

= $3850 + ($3850 ×7/100 × 3)

= $3850 + (3850 × 7 × 3/100)

= $3850 + (26950 × 3/100)

= $3850 + (80850/100)

= $3850 + $808.5 = $4658.5

Thus, Amount (A) to be paid = $4658.5 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = 7/100

∴ For $3850, the simple interest in 1 year

= 7/100 × 3850

= 7 × 3850/100

= 26950/100 = $269.5

Thus, simple interest for 1 year = $269.5

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $269.5 × 3 = $808.5

Thus, Simple Interest (SI) = $808.5

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $808.5

= $4658.5

Thus, Amount to be paid = $4658.5 Answer


Similar Questions

(1) How much loan did Christopher borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6600 to clear it?

(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 7% simple interest?

(3) How much loan did Daniel borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7625 to clear it?

(4) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7301 to clear the loan, then find the time period of the loan.

(5) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?

(6) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.

(7) If Matthew paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(8) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.

(9) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?

(10) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?


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