Simple Interest
Math MCQs

Question :    If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3328

Solution & Explanation

Solution

Given,

Principal (P) = $3200

Rate of Simple Interest (SI) = 2%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3200 × 2% × 2

= $3200 ײ/₁₀₀ × 2

= ^{3200 × 2 × 2}/₁₀₀

= ^{6400 × 2}/₁₀₀

= ¹²⁸⁰⁰/₁₀₀

= $128

Thus, Simple Interest = $128

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 = $3200 + $128

= $3328

Thus, Amount to be paid = $3328 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 = $3200

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 2 years

Thus, Amount (A)

= $3200 + ($3200 × 2% × 2)

= $3200 + ($3200 ײ/₁₀₀ × 2)

= $3200 + (^{3200 × 2 × 2}/₁₀₀)

= $3200 + (^{6400 × 2}/₁₀₀)

= $3200 + (¹²⁸⁰⁰/₁₀₀)

= $3200 + $128 = $3328

Thus, Amount (A) to be paid = $3328 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest in 1 year = $2

∴ For $1, the simple interest in 1 year = ²/₁₀₀

∴ For $3200, the simple interest in 1 year

= ²/₁₀₀ × 3200

= ^{2 × 3200}/₁₀₀

= ⁶⁴⁰⁰/₁₀₀ = $64

Thus, simple interest in 1 year = $64

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $64 × 2 = $128

Thus, Simple Interest (SI) = $128

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $128

= $3328

Thus, Amount to be paid = $3328 Answer

Similar Questions

(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?

(2) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.

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

(4) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.

(5) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.

(6) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(7) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?

(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.

(10) How much loan did Paul borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7705 to clear it?