Simple Interest
Math MCQs

Question :    What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?

Correct Answer  $4400

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 2% × 5

= $4000 ײ/₁₀₀ × 5

= ^{4000 × 2 × 5}/₁₀₀

= ^{8000 × 5}/₁₀₀

= ⁴⁰⁰⁰⁰/₁₀₀

= $400

Thus, Simple Interest = $400

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 = $4000 + $400

= $4400

Thus, Amount to be paid = $4400 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 = $4000

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

And, Time (t) = 5 years

Thus, Amount (A)

= $4000 + ($4000 × 2% × 5)

= $4000 + ($4000 ײ/₁₀₀ × 5)

= $4000 + (^{4000 × 2 × 5}/₁₀₀)

= $4000 + (^{8000 × 5}/₁₀₀)

= $4000 + (⁴⁰⁰⁰⁰/₁₀₀)

= $4000 + $400 = $4400

Thus, Amount (A) to be paid = $4400 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 $4000, the simple interest in 1 year

= ²/₁₀₀ × 4000

= ^{2 × 4000}/₁₀₀

= ⁸⁰⁰⁰/₁₀₀ = $80

Thus, simple interest for 1 year = $80

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $80 × 5 = $400

Thus, Simple Interest (SI) = $400

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $400

= $4400

Thus, Amount to be paid = $4400 Answer

Similar Questions

(1) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9384 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.

(3) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.

(4) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.

(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.

(6) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.

(7) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(8) In how much time a principal of $3150 will amount to $3528 at a simple interest of 3% per annum?

(9) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?

(10) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.