Simple Interest
Math MCQs

Question :    What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?

Correct Answer  $5460

Solution & Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 8% × 5

= $3900 ×⁸/₁₀₀ × 5

= ^{3900 × 8 × 5}/₁₀₀

= ^{31200 × 5}/₁₀₀

= ¹⁵⁶⁰⁰⁰/₁₀₀

= $1560

Thus, Simple Interest = $1560

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 = $3900 + $1560

= $5460

Thus, Amount to be paid = $5460 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 = $3900

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3900 + ($3900 × 8% × 5)

= $3900 + ($3900 ×⁸/₁₀₀ × 5)

= $3900 + (^{3900 × 8 × 5}/₁₀₀)

= $3900 + (^{31200 × 5}/₁₀₀)

= $3900 + (¹⁵⁶⁰⁰⁰/₁₀₀)

= $3900 + $1560 = $5460

Thus, Amount (A) to be paid = $5460 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 $3900, the simple interest in 1 year

= ⁸/₁₀₀ × 3900

= ^{8 × 3900}/₁₀₀

= ³¹²⁰⁰/₁₀₀ = $312

Thus, simple interest for 1 year = $312

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $312 × 5 = $1560

Thus, Simple Interest (SI) = $1560

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $1560

= $5460

Thus, Amount to be paid = $5460 Answer

Similar Questions

(1) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.

(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?

(4) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 8 years.

(6) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 5% simple interest?

(7) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.

(8) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?

(9) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?