Simple Interest
Math MCQs

Question :    What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?

Correct Answer  $3812.5

Solution & Explanation

Solution

Given,

Principal (P) = $3050

Rate of Simple Interest (SI) = 5%

Time (t) = 5 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3050 × 5% × 5

= $3050 ×⁵/₁₀₀ × 5

= ^{3050 × 5 × 5}/₁₀₀

= ^{15250 × 5}/₁₀₀

= ⁷⁶²⁵⁰/₁₀₀

= $762.5

Thus, Simple Interest = $762.5

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 = $3050 + $762.5

= $3812.5

Thus, Amount to be paid = $3812.5 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 = $3050

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 5 years

Thus, Amount (A)

= $3050 + ($3050 × 5% × 5)

= $3050 + ($3050 ×⁵/₁₀₀ × 5)

= $3050 + (^{3050 × 5 × 5}/₁₀₀)

= $3050 + (^{15250 × 5}/₁₀₀)

= $3050 + (⁷⁶²⁵⁰/₁₀₀)

= $3050 + $762.5 = $3812.5

Thus, Amount (A) to be paid = $3812.5 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $3050, the simple interest in 1 year

= ⁵/₁₀₀ × 3050

= ^{5 × 3050}/₁₀₀

= ¹⁵²⁵⁰/₁₀₀ = $152.5

Thus, simple interest for 1 year = $152.5

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $152.5 × 5 = $762.5

Thus, Simple Interest (SI) = $762.5

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3050 + $762.5

= $3812.5

Thus, Amount to be paid = $3812.5 Answer

Similar Questions

(1) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?

(2) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.

(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.

(4) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?

(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.

(6) Paul had to pay $5264 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.

(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.

(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?