Simple Interest
Math MCQs

Question :    Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.

Correct Answer  $4255

Solution & Explanation

Solution

Given,

Principal (P) = $3700

Rate of Simple Interest (SI) = 5%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3700 × 5% × 3

= $3700 ×⁵/₁₀₀ × 3

= ^{3700 × 5 × 3}/₁₀₀

= ^{18500 × 3}/₁₀₀

= ⁵⁵⁵⁰⁰/₁₀₀

= $555

Thus, Simple Interest = $555

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 = $3700 + $555

= $4255

Thus, Amount to be paid = $4255 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 = $3700

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 3 years

Thus, Amount (A)

= $3700 + ($3700 × 5% × 3)

= $3700 + ($3700 ×⁵/₁₀₀ × 3)

= $3700 + (^{3700 × 5 × 3}/₁₀₀)

= $3700 + (^{18500 × 3}/₁₀₀)

= $3700 + (⁵⁵⁵⁰⁰/₁₀₀)

= $3700 + $555 = $4255

Thus, Amount (A) to be paid = $4255 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $3700, the simple interest in 1 year

= ⁵/₁₀₀ × 3700

= ^{5 × 3700}/₁₀₀

= ¹⁸⁵⁰⁰/₁₀₀ = $185

Thus, simple interest for 1 year = $185

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $185 × 3 = $555

Thus, Simple Interest (SI) = $555

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $555

= $4255

Thus, Amount to be paid = $4255 Answer

Similar Questions

(1) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 4% simple interest.

(2) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.

(5) Patricia had to pay $3622.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(7) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?

(8) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 8 years.

(9) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?