Simple Interest
Math MCQs

Question :    What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?

Correct Answer  $5135

Solution & Explanation

Solution

Given,

Principal (P) = $3950

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) = $3950 × 6% × 5

= $3950 ×⁶/₁₀₀ × 5

= ^{3950 × 6 × 5}/₁₀₀

= ^{23700 × 5}/₁₀₀

= ¹¹⁸⁵⁰⁰/₁₀₀

= $1185

Thus, Simple Interest = $1185

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 = $3950 + $1185

= $5135

Thus, Amount to be paid = $5135 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 = $3950

Rate of Simple Interest (SI) or (R) = 6%

And, Time (t) = 5 years

Thus, Amount (A)

= $3950 + ($3950 × 6% × 5)

= $3950 + ($3950 ×⁶/₁₀₀ × 5)

= $3950 + (^{3950 × 6 × 5}/₁₀₀)

= $3950 + (^{23700 × 5}/₁₀₀)

= $3950 + (¹¹⁸⁵⁰⁰/₁₀₀)

= $3950 + $1185 = $5135

Thus, Amount (A) to be paid = $5135 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 $3950, the simple interest in 1 year

= ⁶/₁₀₀ × 3950

= ^{6 × 3950}/₁₀₀

= ²³⁷⁰⁰/₁₀₀ = $237

Thus, simple interest for 1 year = $237

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $237 × 5 = $1185

Thus, Simple Interest (SI) = $1185

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $1185

= $5135

Thus, Amount to be paid = $5135 Answer

Similar Questions

(1) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?

(3) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.

(5) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.

(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 8 years.

(8) If Ashley paid $5096 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(9) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(10) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.