Simple Interest
MCQs Math


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


Correct Answer  $4774

Solution And Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 4% × 6

= $3850 ×4/100 × 6

= 3850 × 4 × 6/100

= 15400 × 6/100

= 92400/100

= $924

Thus, Simple Interest = $924

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 + $924

= $4774

Thus, Amount to be paid = $4774 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) = 4%

And, Time (t) = 6 years

Thus, Amount (A)

= $3850 + ($3850 × 4% × 6)

= $3850 + ($3850 ×4/100 × 6)

= $3850 + (3850 × 4 × 6/100)

= $3850 + (15400 × 6/100)

= $3850 + (92400/100)

= $3850 + $924 = $4774

Thus, Amount (A) to be paid = $4774 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 $3850, the simple interest in 1 year

= 4/100 × 3850

= 4 × 3850/100

= 15400/100 = $154

Thus, simple interest for 1 year = $154

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $154 × 6 = $924

Thus, Simple Interest (SI) = $924

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $924

= $4774

Thus, Amount to be paid = $4774 Answer


Similar Questions

(1) Susan had to pay $3978.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.

(3) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.

(6) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.

(8) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 7% simple interest?

(9) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?

(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 7 years.


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