Simple Interest
Math MCQs

Question :    What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?

Correct Answer  $4661

Solution & Explanation

Solution

Given,

Principal (P) = $3950

Rate of Simple Interest (SI) = 3%

Time (t) = 6 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3950 × 3% × 6

= $3950 ׳/₁₀₀ × 6

= ^{3950 × 3 × 6}/₁₀₀

= ^{11850 × 6}/₁₀₀

= ⁷¹¹⁰⁰/₁₀₀

= $711

Thus, Simple Interest = $711

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 = $3950 + $711

= $4661

Thus, Amount to be paid = $4661 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 = $3950

Rate of Simple Interest (SI) or (R) = 3%

And, Time (t) = 6 years

Thus, Amount (A)

= $3950 + ($3950 × 3% × 6)

= $3950 + ($3950 ׳/₁₀₀ × 6)

= $3950 + (^{3950 × 3 × 6}/₁₀₀)

= $3950 + (^{11850 × 6}/₁₀₀)

= $3950 + (⁷¹¹⁰⁰/₁₀₀)

= $3950 + $711 = $4661

Thus, Amount (A) to be paid = $4661 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = ³/₁₀₀

∴ For $3950, the simple interest in 1 year

= ³/₁₀₀ × 3950

= ^{3 × 3950}/₁₀₀

= ¹¹⁸⁵⁰/₁₀₀ = $118.5

Thus, simple interest for 1 year = $118.5

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $118.5 × 6 = $711

Thus, Simple Interest (SI) = $711

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3950 + $711

= $4661

Thus, Amount to be paid = $4661 Answer

Similar Questions

(1) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.

(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?

(3) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 8 years.

(4) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?

(5) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?

(6) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.

(7) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?

(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 6% simple interest?

(9) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(10) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.