Simple Interest
Math MCQs

Question :    What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?

Correct Answer  $4290

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 2% × 5

= $3900 ײ/₁₀₀ × 5

= ^{3900 × 2 × 5}/₁₀₀

= ^{7800 × 5}/₁₀₀

= ³⁹⁰⁰⁰/₁₀₀

= $390

Thus, Simple Interest = $390

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 + $390

= $4290

Thus, Amount to be paid = $4290 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) = 2%

And, Time (t) = 5 years

Thus, Amount (A)

= $3900 + ($3900 × 2% × 5)

= $3900 + ($3900 ײ/₁₀₀ × 5)

= $3900 + (^{3900 × 2 × 5}/₁₀₀)

= $3900 + (^{7800 × 5}/₁₀₀)

= $3900 + (³⁹⁰⁰⁰/₁₀₀)

= $3900 + $390 = $4290

Thus, Amount (A) to be paid = $4290 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 $3900, the simple interest in 1 year

= ²/₁₀₀ × 3900

= ^{2 × 3900}/₁₀₀

= ⁷⁸⁰⁰/₁₀₀ = $78

Thus, simple interest for 1 year = $78

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $78 × 5 = $390

Thus, Simple Interest (SI) = $390

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $390

= $4290

Thus, Amount to be paid = $4290 Answer

Similar Questions

(1) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.

(2) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.

(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?

(4) How much loan did Jason borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8470 to clear it?

(5) Karen had to pay $4305.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(6) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?

(7) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?

(8) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?

(9) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.

(10) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.