Simple Interest
Math MCQs

Question :    What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?

Correct Answer  $3965

Solution & Explanation

Solution

Given,

Principal (P) = $3050

Rate of Simple Interest (SI) = 6%

Time (t) = 5 years

Thus, Amount (A) = ?

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

Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5

= $3050 ×⁶/₁₀₀ × 5

= ^{3050 × 6 × 5}/₁₀₀

= ^{18300 × 5}/₁₀₀

= ⁹¹⁵⁰⁰/₁₀₀

= $915

Thus, Simple Interest = $915

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 + $915

= $3965

Thus, Amount to be paid = $3965 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) = 6%

And, Time (t) = 5 years

Thus, Amount (A)

= $3050 + ($3050 × 6% × 5)

= $3050 + ($3050 ×⁶/₁₀₀ × 5)

= $3050 + (^{3050 × 6 × 5}/₁₀₀)

= $3050 + (^{18300 × 5}/₁₀₀)

= $3050 + (⁹¹⁵⁰⁰/₁₀₀)

= $3050 + $915 = $3965

Thus, Amount (A) to be paid = $3965 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 6%

This, means, $6 per $100 per year

∵ For $100, the simple interest for 1 year = $6

∴ For $1, the simple interest for 1 year = ⁶/₁₀₀

∴ For $3050, the simple interest in 1 year

= ⁶/₁₀₀ × 3050

= ^{6 × 3050}/₁₀₀

= ¹⁸³⁰⁰/₁₀₀ = $183

Thus, simple interest for 1 year = $183

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $183 × 5 = $915

Thus, Simple Interest (SI) = $915

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3050 + $915

= $3965

Thus, Amount to be paid = $3965 Answer

Similar Questions

(1) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.

(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10281 to clear the loan, then find the time period of the loan.

(3) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.

(4) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?

(5) 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.

(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.

(7) How much loan did Joseph borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6840 to clear it?

(8) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?

(9) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 4 years.

(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.