Simple Interest
Math MCQs

Question :    What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?

Correct Answer  $4620

Solution & Explanation

Solution

Given,

Principal (P) = $3300

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) = $3300 × 8% × 5

= $3300 ×⁸/₁₀₀ × 5

= ^{3300 × 8 × 5}/₁₀₀

= ^{26400 × 5}/₁₀₀

= ¹³²⁰⁰⁰/₁₀₀

= $1320

Thus, Simple Interest = $1320

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 = $3300 + $1320

= $4620

Thus, Amount to be paid = $4620 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 = $3300

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3300 + ($3300 × 8% × 5)

= $3300 + ($3300 ×⁸/₁₀₀ × 5)

= $3300 + (^{3300 × 8 × 5}/₁₀₀)

= $3300 + (^{26400 × 5}/₁₀₀)

= $3300 + (¹³²⁰⁰⁰/₁₀₀)

= $3300 + $1320 = $4620

Thus, Amount (A) to be paid = $4620 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 $3300, the simple interest in 1 year

= ⁸/₁₀₀ × 3300

= ^{8 × 3300}/₁₀₀

= ²⁶⁴⁰⁰/₁₀₀ = $264

Thus, simple interest for 1 year = $264

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $264 × 5 = $1320

Thus, Simple Interest (SI) = $1320

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3300 + $1320

= $4620

Thus, Amount to be paid = $4620 Answer

Similar Questions

(1) Calculate the amount due if Robert borrowed a sum of $3100 at 6% simple interest for 4 years.

(2) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 3% simple interest.

(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 10% simple interest?

(4) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 8 years.

(6) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.

(8) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.

(10) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.