Simple Interest
MCQs Math


Question:     Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.


Correct Answer  $3840

Solution And Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 7%

Time (t) = 4 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) = $3000 × 7% × 4

= $3000 ×7/100 × 4

= 3000 × 7 × 4/100

= 21000 × 4/100

= 84000/100

= $840

Thus, Simple Interest = $840

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 = $3000 + $840

= $3840

Thus, Amount to be paid = $3840 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 = $3000

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 4 years

Thus, Amount (A)

= $3000 + ($3000 × 7% × 4)

= $3000 + ($3000 ×7/100 × 4)

= $3000 + (3000 × 7 × 4/100)

= $3000 + (21000 × 4/100)

= $3000 + (84000/100)

= $3000 + $840 = $3840

Thus, Amount (A) to be paid = $3840 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 $3000, the simple interest in 1 year

= 7/100 × 3000

= 7 × 3000/100

= 21000/100 = $210

Thus, simple interest for 1 year = $210

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $210 × 4 = $840

Thus, Simple Interest (SI) = $840

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $840

= $3840

Thus, Amount to be paid = $3840 Answer


Similar Questions

(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?

(2) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.

(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?

(4) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?

(6) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.

(7) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?

(8) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.

(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.

(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.


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