Simple Interest
MCQs Math


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


Correct Answer  $4002

Solution And Explanation

Solution

Given,

Principal (P) = $3450

Rate of Simple Interest (SI) = 4%

Time (t) = 4 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) = $3450 × 4% × 4

= $3450 ×4/100 × 4

= 3450 × 4 × 4/100

= 13800 × 4/100

= 55200/100

= $552

Thus, Simple Interest = $552

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 = $3450 + $552

= $4002

Thus, Amount to be paid = $4002 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 = $3450

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3450 + ($3450 × 4% × 4)

= $3450 + ($3450 ×4/100 × 4)

= $3450 + (3450 × 4 × 4/100)

= $3450 + (13800 × 4/100)

= $3450 + (55200/100)

= $3450 + $552 = $4002

Thus, Amount (A) to be paid = $4002 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 $3450, the simple interest in 1 year

= 4/100 × 3450

= 4 × 3450/100

= 13800/100 = $138

Thus, simple interest for 1 year = $138

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $138 × 4 = $552

Thus, Simple Interest (SI) = $552

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $552

= $4002

Thus, Amount to be paid = $4002 Answer


Similar Questions

(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?

(2) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.

(4) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.

(5) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?

(6) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.

(8) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.

(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 8 years.


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