Simple Interest
Math MCQs

Question :    What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?

Correct Answer  $3600

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 4%

Time (t) = 5 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3000 × 4% × 5

= $3000 ×⁴/₁₀₀ × 5

= ^{3000 × 4 × 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 = $3000 + $600

= $3600

Thus, Amount to be paid = $3600 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 = $3000

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 5 years

Thus, Amount (A)

= $3000 + ($3000 × 4% × 5)

= $3000 + ($3000 ×⁴/₁₀₀ × 5)

= $3000 + (^{3000 × 4 × 5}/₁₀₀)

= $3000 + (^{12000 × 5}/₁₀₀)

= $3000 + (⁶⁰⁰⁰⁰/₁₀₀)

= $3000 + $600 = $3600

Thus, Amount (A) to be paid = $3600 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $3000, the simple interest in 1 year

= ⁴/₁₀₀ × 3000

= ^{4 × 3000}/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 = $3000 + $600

= $3600

Thus, Amount to be paid = $3600 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.

(2) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?

(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.

(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 3 years.

(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.

(7) David had to pay $3808 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.

(10) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10317 to clear the loan, then find the time period of the loan.