Simple Interest
MCQs Math


Question:     Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.


Correct Answer  $4158

Solution And Explanation

Solution

Given,

Principal (P) = $3150

Rate of Simple Interest (SI) = 8%

Time (t) = 4 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3150 × 8% × 4

= $3150 ×8/100 × 4

= 3150 × 8 × 4/100

= 25200 × 4/100

= 100800/100

= $1008

Thus, Simple Interest = $1008

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 = $3150 + $1008

= $4158

Thus, Amount to be paid = $4158 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 = $3150

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 4 years

Thus, Amount (A)

= $3150 + ($3150 × 8% × 4)

= $3150 + ($3150 ×8/100 × 4)

= $3150 + (3150 × 8 × 4/100)

= $3150 + (25200 × 4/100)

= $3150 + (100800/100)

= $3150 + $1008 = $4158

Thus, Amount (A) to be paid = $4158 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = 8/100

∴ For $3150, the simple interest in 1 year

= 8/100 × 3150

= 8 × 3150/100

= 25200/100 = $252

Thus, simple interest for 1 year = $252

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $252 × 4 = $1008

Thus, Simple Interest (SI) = $1008

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3150 + $1008

= $4158

Thus, Amount to be paid = $4158 Answer


Similar Questions

(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.

(2) Michelle had to pay $5395.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.

(4) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.

(5) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(6) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?

(8) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.

(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?

(10) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.


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