Simple Interest
Math MCQs

Question :    What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?

Correct Answer  $5250

Solution & Explanation

Solution

Given,

Principal (P) = $3750

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) = $3750 × 8% × 5

= $3750 ×⁸/₁₀₀ × 5

= ^{3750 × 8 × 5}/₁₀₀

= ^{30000 × 5}/₁₀₀

= ¹⁵⁰⁰⁰⁰/₁₀₀

= $1500

Thus, Simple Interest = $1500

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 = $3750 + $1500

= $5250

Thus, Amount to be paid = $5250 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 = $3750

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3750 + ($3750 × 8% × 5)

= $3750 + ($3750 ×⁸/₁₀₀ × 5)

= $3750 + (^{3750 × 8 × 5}/₁₀₀)

= $3750 + (^{30000 × 5}/₁₀₀)

= $3750 + (¹⁵⁰⁰⁰⁰/₁₀₀)

= $3750 + $1500 = $5250

Thus, Amount (A) to be paid = $5250 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 $3750, the simple interest in 1 year

= ⁸/₁₀₀ × 3750

= ^{8 × 3750}/₁₀₀

= ³⁰⁰⁰⁰/₁₀₀ = $300

Thus, simple interest for 1 year = $300

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $300 × 5 = $1500

Thus, Simple Interest (SI) = $1500

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3750 + $1500

= $5250

Thus, Amount to be paid = $5250 Answer

Similar Questions

(1) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.

(2) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?

(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 8 years.

(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.

(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.

(6) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?

(7) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(8) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.

(10) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 9% simple interest.