Simple Interest
MCQs Math


Question:     What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?


Correct Answer  $4235

Solution And Explanation

Solution

Given,

Principal (P) = $3850

Rate of Simple Interest (SI) = 2%

Time (t) = 5 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) = $3850 × 2% × 5

= $3850 ×2/100 × 5

= 3850 × 2 × 5/100

= 7700 × 5/100

= 38500/100

= $385

Thus, Simple Interest = $385

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 = $3850 + $385

= $4235

Thus, Amount to be paid = $4235 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 = $3850

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 5 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 5)

= $3850 + ($3850 ×2/100 × 5)

= $3850 + (3850 × 2 × 5/100)

= $3850 + (7700 × 5/100)

= $3850 + (38500/100)

= $3850 + $385 = $4235

Thus, Amount (A) to be paid = $4235 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 $3850, the simple interest in 1 year

= 2/100 × 3850

= 2 × 3850/100

= 7700/100 = $77

Thus, simple interest for 1 year = $77

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $77 × 5 = $385

Thus, Simple Interest (SI) = $385

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $385

= $4235

Thus, Amount to be paid = $4235 Answer


Similar Questions

(1) In how much time a principal of $3200 will amount to $3584 at a simple interest of 3% per annum?

(2) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?

(3) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(4) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 7 years.

(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.

(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.

(8) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.

(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.

(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?


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