Simple Interest
Math MCQs

Question :    What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?

Correct Answer  $4800

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 4% × 5

= $4000 ×⁴/₁₀₀ × 5

= ^{4000 × 4 × 5}/₁₀₀

= ^{16000 × 5}/₁₀₀

= ⁸⁰⁰⁰⁰/₁₀₀

= $800

Thus, Simple Interest = $800

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 = $4000 + $800

= $4800

Thus, Amount to be paid = $4800 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 = $4000

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

And, Time (t) = 5 years

Thus, Amount (A)

= $4000 + ($4000 × 4% × 5)

= $4000 + ($4000 ×⁴/₁₀₀ × 5)

= $4000 + (^{4000 × 4 × 5}/₁₀₀)

= $4000 + (^{16000 × 5}/₁₀₀)

= $4000 + (⁸⁰⁰⁰⁰/₁₀₀)

= $4000 + $800 = $4800

Thus, Amount (A) to be paid = $4800 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 $4000, the simple interest in 1 year

= ⁴/₁₀₀ × 4000

= ^{4 × 4000}/₁₀₀

= ¹⁶⁰⁰⁰/₁₀₀ = $160

Thus, simple interest for 1 year = $160

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $160 × 5 = $800

Thus, Simple Interest (SI) = $800

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $800

= $4800

Thus, Amount to be paid = $4800 Answer

Similar Questions

(1) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.

(2) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?

(3) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.

(4) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.

(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.

(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.

(8) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.

(9) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.

(10) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.