Simple Interest
MCQs Math


Question:     Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 4 years.


Correct Answer  $4266

Solution And Explanation

Solution

Given,

Principal (P) = $3950

Rate of Simple Interest (SI) = 2%

Time (t) = 4 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) = $3950 × 2% × 4

= $3950 ×2/100 × 4

= 3950 × 2 × 4/100

= 7900 × 4/100

= 31600/100

= $316

Thus, Simple Interest = $316

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 + $316

= $4266

Thus, Amount to be paid = $4266 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) = 2%

And, Time (t) = 4 years

Thus, Amount (A)

= $3950 + ($3950 × 2% × 4)

= $3950 + ($3950 ×2/100 × 4)

= $3950 + (3950 × 2 × 4/100)

= $3950 + (7900 × 4/100)

= $3950 + (31600/100)

= $3950 + $316 = $4266

Thus, Amount (A) to be paid = $4266 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 $3950, the simple interest in 1 year

= 2/100 × 3950

= 2 × 3950/100

= 7900/100 = $79

Thus, simple interest for 1 year = $79

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $79 × 4 = $316

Thus, Simple Interest (SI) = $316

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $316

= $4266

Thus, Amount to be paid = $4266 Answer


Similar Questions

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

(2) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.

(4) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?

(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 4 years.

(6) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.

(7) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 3 years.

(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.

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

(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.


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