Simple Interest
Math MCQs

Question :    What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?

Correct Answer  $3450

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 3%

Time (t) = 5 years

Thus, Amount (A) = ?

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

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5

= $3000 ׳/₁₀₀ × 5

= ^{3000 × 3 × 5}/₁₀₀

= ^{9000 × 5}/₁₀₀

= ⁴⁵⁰⁰⁰/₁₀₀

= $450

Thus, Simple Interest = $450

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 + $450

= $3450

Thus, Amount to be paid = $3450 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) = 3%

And, Time (t) = 5 years

Thus, Amount (A)

= $3000 + ($3000 × 3% × 5)

= $3000 + ($3000 ׳/₁₀₀ × 5)

= $3000 + (^{3000 × 3 × 5}/₁₀₀)

= $3000 + (^{9000 × 5}/₁₀₀)

= $3000 + (⁴⁵⁰⁰⁰/₁₀₀)

= $3000 + $450 = $3450

Thus, Amount (A) to be paid = $3450 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = ³/₁₀₀

∴ For $3000, the simple interest in 1 year

= ³/₁₀₀ × 3000

= ^{3 × 3000}/₁₀₀

= ⁹⁰⁰⁰/₁₀₀ = $90

Thus, simple interest for 1 year = $90

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $90 × 5 = $450

Thus, Simple Interest (SI) = $450

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $450

= $3450

Thus, Amount to be paid = $3450 Answer

Similar Questions

(1) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $5848 to clear the loan, then find the time period of the loan.

(2) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?

(3) James had to pay $3450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.

(5) How much loan did Michelle borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7992.5 to clear it?

(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.

(7) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.

(9) Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 8 years.

(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.