Simple Interest
Math MCQs

Question :    What amount does John have to pay after 5 years if he takes a loan of $3200 at 8% simple interest?

Correct Answer  $4480

Solution & Explanation

Solution

Given,

Principal (P) = $3200

Rate of Simple Interest (SI) = 8%

Time (t) = 5 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3200 × 8% × 5

= $3200 ×⁸/₁₀₀ × 5

= ^{3200 × 8 × 5}/₁₀₀

= ^{25600 × 5}/₁₀₀

= ¹²⁸⁰⁰⁰/₁₀₀

= $1280

Thus, Simple Interest = $1280

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 = $3200 + $1280

= $4480

Thus, Amount to be paid = $4480 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 = $3200

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 5 years

Thus, Amount (A)

= $3200 + ($3200 × 8% × 5)

= $3200 + ($3200 ×⁸/₁₀₀ × 5)

= $3200 + (^{3200 × 8 × 5}/₁₀₀)

= $3200 + (^{25600 × 5}/₁₀₀)

= $3200 + (¹²⁸⁰⁰⁰/₁₀₀)

= $3200 + $1280 = $4480

Thus, Amount (A) to be paid = $4480 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $3200, the simple interest in 1 year

= ⁸/₁₀₀ × 3200

= ^{8 × 3200}/₁₀₀

= ²⁵⁶⁰⁰/₁₀₀ = $256

Thus, simple interest for 1 year = $256

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $256 × 5 = $1280

Thus, Simple Interest (SI) = $1280

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $1280

= $4480

Thus, Amount to be paid = $4480 Answer

Similar Questions

(1) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.

(2) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.

(3) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.

(4) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 3 years.

(6) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.

(7) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?

(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?

(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?

(10) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.