Simple Interest
Math MCQs

Question :    What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?

Correct Answer  $4140

Solution & Explanation

Solution

Given,

Principal (P) = $3600

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) = $3600 × 3% × 5

= $3600 ׳/₁₀₀ × 5

= ^{3600 × 3 × 5}/₁₀₀

= ^{10800 × 5}/₁₀₀

= ⁵⁴⁰⁰⁰/₁₀₀

= $540

Thus, Simple Interest = $540

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 = $3600 + $540

= $4140

Thus, Amount to be paid = $4140 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 = $3600

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3600 + ($3600 × 3% × 5)

= $3600 + ($3600 ׳/₁₀₀ × 5)

= $3600 + (^{3600 × 3 × 5}/₁₀₀)

= $3600 + (^{10800 × 5}/₁₀₀)

= $3600 + (⁵⁴⁰⁰⁰/₁₀₀)

= $3600 + $540 = $4140

Thus, Amount (A) to be paid = $4140 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 $3600, the simple interest in 1 year

= ³/₁₀₀ × 3600

= ^{3 × 3600}/₁₀₀

= ¹⁰⁸⁰⁰/₁₀₀ = $108

Thus, simple interest for 1 year = $108

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $108 × 5 = $540

Thus, Simple Interest (SI) = $540

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3600 + $540

= $4140

Thus, Amount to be paid = $4140 Answer

Similar Questions

(1) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?

(2) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.

(3) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.

(4) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.

(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.

(7) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.

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

(10) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.