Simple Interest
Math MCQs

Question :    What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?

Correct Answer  $4020

Solution & Explanation

Solution

Given,

Principal (P) = $3350

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) = $3350 × 4% × 5

= $3350 ×⁴/₁₀₀ × 5

= ^{3350 × 4 × 5}/₁₀₀

= ^{13400 × 5}/₁₀₀

= ⁶⁷⁰⁰⁰/₁₀₀

= $670

Thus, Simple Interest = $670

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 = $3350 + $670

= $4020

Thus, Amount to be paid = $4020 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 = $3350

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3350 + ($3350 × 4% × 5)

= $3350 + ($3350 ×⁴/₁₀₀ × 5)

= $3350 + (^{3350 × 4 × 5}/₁₀₀)

= $3350 + (^{13400 × 5}/₁₀₀)

= $3350 + (⁶⁷⁰⁰⁰/₁₀₀)

= $3350 + $670 = $4020

Thus, Amount (A) to be paid = $4020 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 $3350, the simple interest in 1 year

= ⁴/₁₀₀ × 3350

= ^{4 × 3350}/₁₀₀

= ¹³⁴⁰⁰/₁₀₀ = $134

Thus, simple interest for 1 year = $134

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $134 × 5 = $670

Thus, Simple Interest (SI) = $670

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3350 + $670

= $4020

Thus, Amount to be paid = $4020 Answer

Similar Questions

(1) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.

(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?

(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.

(4) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.

(6) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.

(7) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?

(8) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?

(9) How much loan did Robert borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6375 to clear it?

(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.