Simple Interest
Math MCQs

Question :  ( 1 of 10 )  What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?

Correct Answer  $4200

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 4% × 5

= $3500 ×⁴/₁₀₀ × 5

= ^{3500 × 4 × 5}/₁₀₀

= ^{14000 × 5}/₁₀₀

= ⁷⁰⁰⁰⁰/₁₀₀

= $700

Thus, Simple Interest = $700

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 = $3500 + $700

= $4200

Thus, Amount to be paid = $4200 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 = $3500

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3500 + ($3500 × 4% × 5)

= $3500 + ($3500 ×⁴/₁₀₀ × 5)

= $3500 + (^{3500 × 4 × 5}/₁₀₀)

= $3500 + (^{14000 × 5}/₁₀₀)

= $3500 + (⁷⁰⁰⁰⁰/₁₀₀)

= $3500 + $700 = $4200

Thus, Amount (A) to be paid = $4200 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 $3500, the simple interest in 1 year

= ⁴/₁₀₀ × 3500

= ^{4 × 3500}/₁₀₀

= ¹⁴⁰⁰⁰/₁₀₀ = $140

Thus, simple interest for 1 year = $140

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $140 × 5 = $700

Thus, Simple Interest (SI) = $700

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $700

= $4200

Thus, Amount to be paid = $4200 Answer

Similar Questions

(1) Daniel had to pay $4592 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

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

(3) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $13600 to clear the loan, then find the time period of the loan.

(4) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.

(6) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?

(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.

(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 8 years.

(9) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.

(10) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.