Simple Interest
MCQs Math


Question:     What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?


Correct Answer  $4216

Solution And Explanation

Solution

Given,

Principal (P) = $3400

Rate of Simple Interest (SI) = 4%

Time (t) = 6 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) = $3400 × 4% × 6

= $3400 ×4/100 × 6

= 3400 × 4 × 6/100

= 13600 × 6/100

= 81600/100

= $816

Thus, Simple Interest = $816

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 = $3400 + $816

= $4216

Thus, Amount to be paid = $4216 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 = $3400

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3400 + ($3400 × 4% × 6)

= $3400 + ($3400 ×4/100 × 6)

= $3400 + (3400 × 4 × 6/100)

= $3400 + (13600 × 6/100)

= $3400 + (81600/100)

= $3400 + $816 = $4216

Thus, Amount (A) to be paid = $4216 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 $3400, the simple interest in 1 year

= 4/100 × 3400

= 4 × 3400/100

= 13600/100 = $136

Thus, simple interest for 1 year = $136

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $136 × 6 = $816

Thus, Simple Interest (SI) = $816

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $816

= $4216

Thus, Amount to be paid = $4216 Answer


Similar Questions

(1) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.

(2) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?

(3) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?

(5) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.

(6) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 4 years.

(7) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.

(8) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?

(9) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.

(10) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?


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