Simple Interest
Math MCQs

Question :    What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 8% simple interest?

Correct Answer  $5476

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 8% × 6

= $3700 ×⁸/₁₀₀ × 6

= ^{3700 × 8 × 6}/₁₀₀

= ^{29600 × 6}/₁₀₀

= ¹⁷⁷⁶⁰⁰/₁₀₀

= $1776

Thus, Simple Interest = $1776

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 = $3700 + $1776

= $5476

Thus, Amount to be paid = $5476 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 = $3700

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3700 + ($3700 × 8% × 6)

= $3700 + ($3700 ×⁸/₁₀₀ × 6)

= $3700 + (^{3700 × 8 × 6}/₁₀₀)

= $3700 + (^{29600 × 6}/₁₀₀)

= $3700 + (¹⁷⁷⁶⁰⁰/₁₀₀)

= $3700 + $1776 = $5476

Thus, Amount (A) to be paid = $5476 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 $3700, the simple interest in 1 year

= ⁸/₁₀₀ × 3700

= ^{8 × 3700}/₁₀₀

= ²⁹⁶⁰⁰/₁₀₀ = $296

Thus, simple interest for 1 year = $296

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $296 × 6 = $1776

Thus, Simple Interest (SI) = $1776

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $1776

= $5476

Thus, Amount to be paid = $5476 Answer

Similar Questions

(1) How much loan did Mary borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6060 to clear it?

(2) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.

(3) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.

(4) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

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

(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 2% simple interest?

(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.

(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?

(9) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.