Simple Interest
Math MCQs

Question :    What amount does William have to pay after 6 years if he takes a loan of $3500 at 4% simple interest?

Correct Answer  $4340

Solution & Explanation

Solution

Given,

Principal (P) = $3500

Rate of Simple Interest (SI) = 4%

Time (t) = 6 years

Thus, Amount (A) = ?

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

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3500 × 4% × 6

= $3500 ×⁴/₁₀₀ × 6

= ^{3500 × 4 × 6}/₁₀₀

= ^{14000 × 6}/₁₀₀

= ⁸⁴⁰⁰⁰/₁₀₀

= $840

Thus, Simple Interest = $840

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 = $3500 + $840

= $4340

Thus, Amount to be paid = $4340 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 = $3500

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 6 years

Thus, Amount (A)

= $3500 + ($3500 × 4% × 6)

= $3500 + ($3500 ×⁴/₁₀₀ × 6)

= $3500 + (^{3500 × 4 × 6}/₁₀₀)

= $3500 + (^{14000 × 6}/₁₀₀)

= $3500 + (⁸⁴⁰⁰⁰/₁₀₀)

= $3500 + $840 = $4340

Thus, Amount (A) to be paid = $4340 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $3500, the simple interest in 1 year

= ⁴/₁₀₀ × 3500

= ^{4 × 3500}/₁₀₀

= ¹⁴⁰⁰⁰/₁₀₀ = $140

Thus, simple interest for 1 year = $140

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $140 × 6 = $840

Thus, Simple Interest (SI) = $840

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $840

= $4340

Thus, Amount to be paid = $4340 Answer

Similar Questions

(1) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 8 years.

(3) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?

(4) In how much time a principal of $3100 will amount to $3348 at a simple interest of 2% per annum?

(5) If Sandra paid $5340 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.

(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?

(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 3 years.

(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?

(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.