Simple Interest
Math MCQs

Question :    What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?

Correct Answer  $4485

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 3% × 5

= $3900 ׳/₁₀₀ × 5

= ^{3900 × 3 × 5}/₁₀₀

= ^{11700 × 5}/₁₀₀

= ⁵⁸⁵⁰⁰/₁₀₀

= $585

Thus, Simple Interest = $585

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 = $3900 + $585

= $4485

Thus, Amount to be paid = $4485 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 = $3900

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3900 + ($3900 × 3% × 5)

= $3900 + ($3900 ׳/₁₀₀ × 5)

= $3900 + (^{3900 × 3 × 5}/₁₀₀)

= $3900 + (^{11700 × 5}/₁₀₀)

= $3900 + (⁵⁸⁵⁰⁰/₁₀₀)

= $3900 + $585 = $4485

Thus, Amount (A) to be paid = $4485 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 $3900, the simple interest in 1 year

= ³/₁₀₀ × 3900

= ^{3 × 3900}/₁₀₀

= ¹¹⁷⁰⁰/₁₀₀ = $117

Thus, simple interest for 1 year = $117

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $117 × 5 = $585

Thus, Simple Interest (SI) = $585

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $585

= $4485

Thus, Amount to be paid = $4485 Answer

Similar Questions

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

(2) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?

(3) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?

(5) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.

(7) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.

(8) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?

(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.

(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?