Simple Interest
Math MCQs

Question :    What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?

Correct Answer  $4025

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 3% × 5

= $3500 ׳/₁₀₀ × 5

= ^{3500 × 3 × 5}/₁₀₀

= ^{10500 × 5}/₁₀₀

= ⁵²⁵⁰⁰/₁₀₀

= $525

Thus, Simple Interest = $525

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 = $3500 + $525

= $4025

Thus, Amount to be paid = $4025 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 = $3500

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3500 + ($3500 × 3% × 5)

= $3500 + ($3500 ׳/₁₀₀ × 5)

= $3500 + (^{3500 × 3 × 5}/₁₀₀)

= $3500 + (^{10500 × 5}/₁₀₀)

= $3500 + (⁵²⁵⁰⁰/₁₀₀)

= $3500 + $525 = $4025

Thus, Amount (A) to be paid = $4025 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 $3500, the simple interest in 1 year

= ³/₁₀₀ × 3500

= ^{3 × 3500}/₁₀₀

= ¹⁰⁵⁰⁰/₁₀₀ = $105

Thus, simple interest for 1 year = $105

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $105 × 5 = $525

Thus, Simple Interest (SI) = $525

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $525

= $4025

Thus, Amount to be paid = $4025 Answer

Similar Questions

(1) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(2) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.

(3) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?

(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.

(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?

(6) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.

(8) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.

(9) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?

(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?