Simple Interest
Math MCQs

Question :    What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?

Correct Answer  $3680

Solution & Explanation

Solution

Given,

Principal (P) = $3200

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) = $3200 × 3% × 5

= $3200 ׳/₁₀₀ × 5

= ^{3200 × 3 × 5}/₁₀₀

= ^{9600 × 5}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀

= $480

Thus, Simple Interest = $480

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 = $3200 + $480

= $3680

Thus, Amount to be paid = $3680 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 = $3200

Rate of Simple Interest (SI) or (R) = 3%

And, Time (t) = 5 years

Thus, Amount (A)

= $3200 + ($3200 × 3% × 5)

= $3200 + ($3200 ׳/₁₀₀ × 5)

= $3200 + (^{3200 × 3 × 5}/₁₀₀)

= $3200 + (^{9600 × 5}/₁₀₀)

= $3200 + (⁴⁸⁰⁰⁰/₁₀₀)

= $3200 + $480 = $3680

Thus, Amount (A) to be paid = $3680 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 $3200, the simple interest in 1 year

= ³/₁₀₀ × 3200

= ^{3 × 3200}/₁₀₀

= ⁹⁶⁰⁰/₁₀₀ = $96

Thus, simple interest for 1 year = $96

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $96 × 5 = $480

Thus, Simple Interest (SI) = $480

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $480

= $3680

Thus, Amount to be paid = $3680 Answer

Similar Questions

(1) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 3 years.

(3) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(4) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.

(5) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.

(6) What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?

(7) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 7 years.

(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 8 years.

(9) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 7% simple interest?

(10) If James paid $3480 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.