Simple Interest
Math MCQs

Question :  ( 1 of 10 )  What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?

Correct Answer  $4680

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 4% × 5

= $3900 ×⁴/₁₀₀ × 5

= ^{3900 × 4 × 5}/₁₀₀

= ^{15600 × 5}/₁₀₀

= ⁷⁸⁰⁰⁰/₁₀₀

= $780

Thus, Simple Interest = $780

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 = $3900 + $780

= $4680

Thus, Amount to be paid = $4680 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 = $3900

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3900 + ($3900 × 4% × 5)

= $3900 + ($3900 ×⁴/₁₀₀ × 5)

= $3900 + (^{3900 × 4 × 5}/₁₀₀)

= $3900 + (^{15600 × 5}/₁₀₀)

= $3900 + (⁷⁸⁰⁰⁰/₁₀₀)

= $3900 + $780 = $4680

Thus, Amount (A) to be paid = $4680 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 $3900, the simple interest in 1 year

= ⁴/₁₀₀ × 3900

= ^{4 × 3900}/₁₀₀

= ¹⁵⁶⁰⁰/₁₀₀ = $156

Thus, simple interest for 1 year = $156

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $156 × 5 = $780

Thus, Simple Interest (SI) = $780

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $780

= $4680

Thus, Amount to be paid = $4680 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.

(2) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.

(3) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.

(4) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.

(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?

(6) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7301 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.

(8) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(9) Sandra had to pay $4850.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(10) How much loan did Nancy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7687.5 to clear it?