Simple Interest
Math MCQs

Question :    What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?

Correct Answer  $4687.5

Solution & Explanation

Solution

Given,

Principal (P) = $3750

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) = $3750 × 5% × 5

= $3750 ×⁵/₁₀₀ × 5

= ^{3750 × 5 × 5}/₁₀₀

= ^{18750 × 5}/₁₀₀

= ⁹³⁷⁵⁰/₁₀₀

= $937.5

Thus, Simple Interest = $937.5

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 = $3750 + $937.5

= $4687.5

Thus, Amount to be paid = $4687.5 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 = $3750

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3750 + ($3750 × 5% × 5)

= $3750 + ($3750 ×⁵/₁₀₀ × 5)

= $3750 + (^{3750 × 5 × 5}/₁₀₀)

= $3750 + (^{18750 × 5}/₁₀₀)

= $3750 + (⁹³⁷⁵⁰/₁₀₀)

= $3750 + $937.5 = $4687.5

Thus, Amount (A) to be paid = $4687.5 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 $3750, the simple interest in 1 year

= ⁵/₁₀₀ × 3750

= ^{5 × 3750}/₁₀₀

= ¹⁸⁷⁵⁰/₁₀₀ = $187.5

Thus, simple interest for 1 year = $187.5

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $187.5 × 5 = $937.5

Thus, Simple Interest (SI) = $937.5

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3750 + $937.5

= $4687.5

Thus, Amount to be paid = $4687.5 Answer

Similar Questions

(1) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.

(3) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?

(4) Kenneth had to pay $5450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(5) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?

(6) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(7) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.

(9) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.

(10) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.