Simple Interest
Math MCQs

Question :    What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?

Correct Answer  $3300

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 2%

Time (t) = 5 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3000 × 2% × 5

= $3000 ײ/₁₀₀ × 5

= ^{3000 × 2 × 5}/₁₀₀

= ^{6000 × 5}/₁₀₀

= ³⁰⁰⁰⁰/₁₀₀

= $300

Thus, Simple Interest = $300

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 = $3000 + $300

= $3300

Thus, Amount to be paid = $3300 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 = $3000

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 5 years

Thus, Amount (A)

= $3000 + ($3000 × 2% × 5)

= $3000 + ($3000 ײ/₁₀₀ × 5)

= $3000 + (^{3000 × 2 × 5}/₁₀₀)

= $3000 + (^{6000 × 5}/₁₀₀)

= $3000 + (³⁰⁰⁰⁰/₁₀₀)

= $3000 + $300 = $3300

Thus, Amount (A) to be paid = $3300 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $3000, the simple interest in 1 year

= ²/₁₀₀ × 3000

= ^{2 × 3000}/₁₀₀

= ⁶⁰⁰⁰/₁₀₀ = $60

Thus, simple interest for 1 year = $60

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $60 × 5 = $300

Thus, Simple Interest (SI) = $300

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $300

= $3300

Thus, Amount to be paid = $3300 Answer

Similar Questions

(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.

(2) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.

(3) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?

(4) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.

(5) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.

(7) William had to pay $3920 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.

(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 7 years.

(10) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.