Simple Interest
MCQs Math


Question:     What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?


Correct Answer  $4836

Solution And Explanation

Solution

Given,

Principal (P) = $3900

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) = $3900 × 4% × 6

= $3900 ×4/100 × 6

= 3900 × 4 × 6/100

= 15600 × 6/100

= 93600/100

= $936

Thus, Simple Interest = $936

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 = $3900 + $936

= $4836

Thus, Amount to be paid = $4836 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 = $3900

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3900 + ($3900 × 4% × 6)

= $3900 + ($3900 ×4/100 × 6)

= $3900 + (3900 × 4 × 6/100)

= $3900 + (15600 × 6/100)

= $3900 + (93600/100)

= $3900 + $936 = $4836

Thus, Amount (A) to be paid = $4836 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 $3900, the simple interest in 1 year

= 4/100 × 3900

= 4 × 3900/100

= 15600/100 = $156

Thus, simple interest for 1 year = $156

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $156 × 6 = $936

Thus, Simple Interest (SI) = $936

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3900 + $936

= $4836

Thus, Amount to be paid = $4836 Answer


Similar Questions

(1) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.

(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.

(4) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.

(5) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?

(6) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.

(7) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.

(8) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.

(9) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?

(10) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.


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