Simple Interest
Math MCQs

Question :    Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.

Correct Answer  $4370

Solution & Explanation

Solution

Given,

Principal (P) = $3800

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) = $3800 × 5% × 3

= $3800 ×⁵/₁₀₀ × 3

= ^{3800 × 5 × 3}/₁₀₀

= ^{19000 × 3}/₁₀₀

= ⁵⁷⁰⁰⁰/₁₀₀

= $570

Thus, Simple Interest = $570

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 = $3800 + $570

= $4370

Thus, Amount to be paid = $4370 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 = $3800

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

And, Time (t) = 3 years

Thus, Amount (A)

= $3800 + ($3800 × 5% × 3)

= $3800 + ($3800 ×⁵/₁₀₀ × 3)

= $3800 + (^{3800 × 5 × 3}/₁₀₀)

= $3800 + (^{19000 × 3}/₁₀₀)

= $3800 + (⁵⁷⁰⁰⁰/₁₀₀)

= $3800 + $570 = $4370

Thus, Amount (A) to be paid = $4370 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 $3800, the simple interest in 1 year

= ⁵/₁₀₀ × 3800

= ^{5 × 3800}/₁₀₀

= ¹⁹⁰⁰⁰/₁₀₀ = $190

Thus, simple interest for 1 year = $190

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $190 × 3 = $570

Thus, Simple Interest (SI) = $570

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $570

= $4370

Thus, Amount to be paid = $4370 Answer

Similar Questions

(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?

(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?

(3) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.

(4) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.

(6) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.

(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 7% simple interest?

(8) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.

(9) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?

(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.