Simple Interest
Math MCQs

Question :    Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.

Correct Answer  $4485

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 5% × 3

= $3900 ×⁵/₁₀₀ × 3

= ^{3900 × 5 × 3}/₁₀₀

= ^{19500 × 3}/₁₀₀

= ⁵⁸⁵⁰⁰/₁₀₀

= $585

Thus, Simple Interest = $585

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 = $3900 + $585

= $4485

Thus, Amount to be paid = $4485 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 = $3900

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

And, Time (t) = 3 years

Thus, Amount (A)

= $3900 + ($3900 × 5% × 3)

= $3900 + ($3900 ×⁵/₁₀₀ × 3)

= $3900 + (^{3900 × 5 × 3}/₁₀₀)

= $3900 + (^{19500 × 3}/₁₀₀)

= $3900 + (⁵⁸⁵⁰⁰/₁₀₀)

= $3900 + $585 = $4485

Thus, Amount (A) to be paid = $4485 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 $3900, the simple interest in 1 year

= ⁵/₁₀₀ × 3900

= ^{5 × 3900}/₁₀₀

= ¹⁹⁵⁰⁰/₁₀₀ = $195

Thus, simple interest for 1 year = $195

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $195 × 3 = $585

Thus, Simple Interest (SI) = $585

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $585

= $4485

Thus, Amount to be paid = $4485 Answer

Similar Questions

(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.

(2) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 4% simple interest?

(3) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.

(4) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.

(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.

(6) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?

(7) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.

(8) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?

(9) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?