Simple Interest
Math MCQs

Question :    What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 8% simple interest?

Correct Answer  $5600

Solution & Explanation

Solution

Given,

Principal (P) = $4000

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) = $4000 × 8% × 5

= $4000 ×⁸/₁₀₀ × 5

= ^{4000 × 8 × 5}/₁₀₀

= ^{32000 × 5}/₁₀₀

= ¹⁶⁰⁰⁰⁰/₁₀₀

= $1600

Thus, Simple Interest = $1600

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 = $4000 + $1600

= $5600

Thus, Amount to be paid = $5600 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 = $4000

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

And, Time (t) = 5 years

Thus, Amount (A)

= $4000 + ($4000 × 8% × 5)

= $4000 + ($4000 ×⁸/₁₀₀ × 5)

= $4000 + (^{4000 × 8 × 5}/₁₀₀)

= $4000 + (^{32000 × 5}/₁₀₀)

= $4000 + (¹⁶⁰⁰⁰⁰/₁₀₀)

= $4000 + $1600 = $5600

Thus, Amount (A) to be paid = $5600 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 $4000, the simple interest in 1 year

= ⁸/₁₀₀ × 4000

= ^{8 × 4000}/₁₀₀

= ³²⁰⁰⁰/₁₀₀ = $320

Thus, simple interest for 1 year = $320

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $320 × 5 = $1600

Thus, Simple Interest (SI) = $1600

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $1600

= $5600

Thus, Amount to be paid = $5600 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 6% simple interest.

(2) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?

(3) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.

(4) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.

(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?

(6) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?

(7) Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 7 years.

(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.

(9) 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?

(10) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 10% simple interest?