Simple Interest
MCQs Math


Question:     Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.


Correct Answer  $4224

Solution And Explanation

Solution

Given,

Principal (P) = $3200

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) = $3200 × 8% × 4

= $3200 ×8/100 × 4

= 3200 × 8 × 4/100

= 25600 × 4/100

= 102400/100

= $1024

Thus, Simple Interest = $1024

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 = $3200 + $1024

= $4224

Thus, Amount to be paid = $4224 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 = $3200

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

And, Time (t) = 4 years

Thus, Amount (A)

= $3200 + ($3200 × 8% × 4)

= $3200 + ($3200 ×8/100 × 4)

= $3200 + (3200 × 8 × 4/100)

= $3200 + (25600 × 4/100)

= $3200 + (102400/100)

= $3200 + $1024 = $4224

Thus, Amount (A) to be paid = $4224 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 $3200, the simple interest in 1 year

= 8/100 × 3200

= 8 × 3200/100

= 25600/100 = $256

Thus, simple interest for 1 year = $256

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $256 × 4 = $1024

Thus, Simple Interest (SI) = $1024

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $1024

= $4224

Thus, Amount to be paid = $4224 Answer


Similar Questions

(1) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?

(2) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 7 years.

(3) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?

(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.

(5) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?

(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?

(7) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.

(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.

(9) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 3 years.


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