Simple Interest
Math MCQs

Question :    What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 3% simple interest?

Correct Answer  $4600

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 3% × 5

= $4000 ׳/₁₀₀ × 5

= ^{4000 × 3 × 5}/₁₀₀

= ^{12000 × 5}/₁₀₀

= ⁶⁰⁰⁰⁰/₁₀₀

= $600

Thus, Simple Interest = $600

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 = $4000 + $600

= $4600

Thus, Amount to be paid = $4600 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 = $4000

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

And, Time (t) = 5 years

Thus, Amount (A)

= $4000 + ($4000 × 3% × 5)

= $4000 + ($4000 ׳/₁₀₀ × 5)

= $4000 + (^{4000 × 3 × 5}/₁₀₀)

= $4000 + (^{12000 × 5}/₁₀₀)

= $4000 + (⁶⁰⁰⁰⁰/₁₀₀)

= $4000 + $600 = $4600

Thus, Amount (A) to be paid = $4600 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 $4000, the simple interest in 1 year

= ³/₁₀₀ × 4000

= ^{3 × 4000}/₁₀₀

= ¹²⁰⁰⁰/₁₀₀ = $120

Thus, simple interest for 1 year = $120

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $120 × 5 = $600

Thus, Simple Interest (SI) = $600

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $600

= $4600

Thus, Amount to be paid = $4600 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.

(2) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.

(3) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.

(4) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.

(5) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(7) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.

(8) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?

(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?

(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.