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 Christopher borrowed a sum of $6000 at 10% simple interest for 8 years.

(2) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?

(3) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?

(4) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?

(5) If Kenneth paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(6) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10600 to clear the loan, then find the time period of the loan.

(7) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.

(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

(9) If David paid $3944 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(10) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.