Simple Interest
Math MCQs

Question :    What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?

Correct Answer  $4690

Solution & Explanation

Solution

Given,

Principal (P) = $3350

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) = $3350 × 8% × 5

= $3350 ×⁸/₁₀₀ × 5

= ^{3350 × 8 × 5}/₁₀₀

= ^{26800 × 5}/₁₀₀

= ¹³⁴⁰⁰⁰/₁₀₀

= $1340

Thus, Simple Interest = $1340

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 = $3350 + $1340

= $4690

Thus, Amount to be paid = $4690 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 = $3350

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3350 + ($3350 × 8% × 5)

= $3350 + ($3350 ×⁸/₁₀₀ × 5)

= $3350 + (^{3350 × 8 × 5}/₁₀₀)

= $3350 + (^{26800 × 5}/₁₀₀)

= $3350 + (¹³⁴⁰⁰⁰/₁₀₀)

= $3350 + $1340 = $4690

Thus, Amount (A) to be paid = $4690 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 $3350, the simple interest in 1 year

= ⁸/₁₀₀ × 3350

= ^{8 × 3350}/₁₀₀

= ²⁶⁸⁰⁰/₁₀₀ = $268

Thus, simple interest for 1 year = $268

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $268 × 5 = $1340

Thus, Simple Interest (SI) = $1340

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3350 + $1340

= $4690

Thus, Amount to be paid = $4690 Answer

Similar Questions

(1) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?

(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.

(3) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.

(5) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.

(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 9% simple interest?

(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.

(8) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 9% simple interest.

(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.

(10) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.