Simple Interest
Math MCQs

Question :    What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?

Correct Answer  $3910

Solution & Explanation

Solution

Given,

Principal (P) = $3400

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) = $3400 × 3% × 5

= $3400 ׳/₁₀₀ × 5

= ^{3400 × 3 × 5}/₁₀₀

= ^{10200 × 5}/₁₀₀

= ⁵¹⁰⁰⁰/₁₀₀

= $510

Thus, Simple Interest = $510

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 = $3400 + $510

= $3910

Thus, Amount to be paid = $3910 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 = $3400

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3400 + ($3400 × 3% × 5)

= $3400 + ($3400 ׳/₁₀₀ × 5)

= $3400 + (^{3400 × 3 × 5}/₁₀₀)

= $3400 + (^{10200 × 5}/₁₀₀)

= $3400 + (⁵¹⁰⁰⁰/₁₀₀)

= $3400 + $510 = $3910

Thus, Amount (A) to be paid = $3910 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 $3400, the simple interest in 1 year

= ³/₁₀₀ × 3400

= ^{3 × 3400}/₁₀₀

= ¹⁰²⁰⁰/₁₀₀ = $102

Thus, simple interest for 1 year = $102

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $102 × 5 = $510

Thus, Simple Interest (SI) = $510

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $510

= $3910

Thus, Amount to be paid = $3910 Answer

Similar Questions

(1) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.

(2) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $7992 to clear the loan, then find the time period of the loan.

(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?

(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 8 years.

(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.

(6) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?

(7) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.

(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.

(9) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?

(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.