Simple Interest
Math MCQs

Question :    What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?

Correct Answer  $5180

Solution & Explanation

Solution

Given,

Principal (P) = $3500

Rate of Simple Interest (SI) = 8%

Time (t) = 6 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) = $3500 × 8% × 6

= $3500 ×⁸/₁₀₀ × 6

= ^{3500 × 8 × 6}/₁₀₀

= ^{28000 × 6}/₁₀₀

= ¹⁶⁸⁰⁰⁰/₁₀₀

= $1680

Thus, Simple Interest = $1680

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 + $1680

= $5180

Thus, Amount to be paid = $5180 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) = 8%

And, Time (t) = 6 years

Thus, Amount (A)

= $3500 + ($3500 × 8% × 6)

= $3500 + ($3500 ×⁸/₁₀₀ × 6)

= $3500 + (^{3500 × 8 × 6}/₁₀₀)

= $3500 + (^{28000 × 6}/₁₀₀)

= $3500 + (¹⁶⁸⁰⁰⁰/₁₀₀)

= $3500 + $1680 = $5180

Thus, Amount (A) to be paid = $5180 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 $3500, the simple interest in 1 year

= ⁸/₁₀₀ × 3500

= ^{8 × 3500}/₁₀₀

= ²⁸⁰⁰⁰/₁₀₀ = $280

Thus, simple interest for 1 year = $280

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $280 × 6 = $1680

Thus, Simple Interest (SI) = $1680

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $1680

= $5180

Thus, Amount to be paid = $5180 Answer

Similar Questions

(1) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?

(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 4 years.

(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 6% simple interest?

(4) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.

(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.

(6) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8682.5 to clear it?

(7) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.

(8) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.

(9) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(10) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.