Simple Interest
Math MCQs

Question :    What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?

Correct Answer  $5320

Solution & Explanation

Solution

Given,

Principal (P) = $3800

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) = $3800 × 8% × 5

= $3800 ×⁸/₁₀₀ × 5

= ^{3800 × 8 × 5}/₁₀₀

= ^{30400 × 5}/₁₀₀

= ¹⁵²⁰⁰⁰/₁₀₀

= $1520

Thus, Simple Interest = $1520

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 = $3800 + $1520

= $5320

Thus, Amount to be paid = $5320 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 = $3800

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3800 + ($3800 × 8% × 5)

= $3800 + ($3800 ×⁸/₁₀₀ × 5)

= $3800 + (^{3800 × 8 × 5}/₁₀₀)

= $3800 + (^{30400 × 5}/₁₀₀)

= $3800 + (¹⁵²⁰⁰⁰/₁₀₀)

= $3800 + $1520 = $5320

Thus, Amount (A) to be paid = $5320 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 $3800, the simple interest in 1 year

= ⁸/₁₀₀ × 3800

= ^{8 × 3800}/₁₀₀

= ³⁰⁴⁰⁰/₁₀₀ = $304

Thus, simple interest for 1 year = $304

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $304 × 5 = $1520

Thus, Simple Interest (SI) = $1520

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $1520

= $5320

Thus, Amount to be paid = $5320 Answer

Similar Questions

(1) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.

(3) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.

(4) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?

(5) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.

(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?

(7) How much loan did Betty borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7187.5 to clear it?

(8) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.

(9) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.