Simple Interest
Math MCQs

Question :    What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?

Correct Answer  $3840

Solution & Explanation

Solution

Given,

Principal (P) = $3200

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) = $3200 × 4% × 5

= $3200 ×⁴/₁₀₀ × 5

= ^{3200 × 4 × 5}/₁₀₀

= ^{12800 × 5}/₁₀₀

= ⁶⁴⁰⁰⁰/₁₀₀

= $640

Thus, Simple Interest = $640

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 = $3200 + $640

= $3840

Thus, Amount to be paid = $3840 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 = $3200

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3200 + ($3200 × 4% × 5)

= $3200 + ($3200 ×⁴/₁₀₀ × 5)

= $3200 + (^{3200 × 4 × 5}/₁₀₀)

= $3200 + (^{12800 × 5}/₁₀₀)

= $3200 + (⁶⁴⁰⁰⁰/₁₀₀)

= $3200 + $640 = $3840

Thus, Amount (A) to be paid = $3840 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 $3200, the simple interest in 1 year

= ⁴/₁₀₀ × 3200

= ^{4 × 3200}/₁₀₀

= ¹²⁸⁰⁰/₁₀₀ = $128

Thus, simple interest for 1 year = $128

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $128 × 5 = $640

Thus, Simple Interest (SI) = $640

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $640

= $3840

Thus, Amount to be paid = $3840 Answer

Similar Questions

(1) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.

(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 7% simple interest?

(3) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 4% simple interest?

(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.

(5) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?

(6) In how much time a principal of $3200 will amount to $4000 at a simple interest of 5% per annum?

(7) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.

(8) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?

(9) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.

(10) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?