Simple Interest
Math MCQs

Question :    What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?

Correct Answer  $4260

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 7%

Time (t) = 6 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3000 × 7% × 6

= $3000 ×⁷/₁₀₀ × 6

= ^{3000 × 7 × 6}/₁₀₀

= ^{21000 × 6}/₁₀₀

= ¹²⁶⁰⁰⁰/₁₀₀

= $1260

Thus, Simple Interest = $1260

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 = $3000 + $1260

= $4260

Thus, Amount to be paid = $4260 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 = $3000

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 6 years

Thus, Amount (A)

= $3000 + ($3000 × 7% × 6)

= $3000 + ($3000 ×⁷/₁₀₀ × 6)

= $3000 + (^{3000 × 7 × 6}/₁₀₀)

= $3000 + (^{21000 × 6}/₁₀₀)

= $3000 + (¹²⁶⁰⁰⁰/₁₀₀)

= $3000 + $1260 = $4260

Thus, Amount (A) to be paid = $4260 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = ⁷/₁₀₀

∴ For $3000, the simple interest in 1 year

= ⁷/₁₀₀ × 3000

= ^{7 × 3000}/₁₀₀

= ²¹⁰⁰⁰/₁₀₀ = $210

Thus, simple interest for 1 year = $210

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $210 × 6 = $1260

Thus, Simple Interest (SI) = $1260

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $1260

= $4260

Thus, Amount to be paid = $4260 Answer

Similar Questions

(1) If Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 3 years.

(3) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.

(4) If Christopher paid $4800 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.

(6) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $10240 to clear the loan, then find the time period of the loan.

(7) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6854 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.

(9) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6258 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.