Simple Interest
Math MCQs

Question :    If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3380

Solution & Explanation

Solution

Given,

Principal (P) = $3250

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) = $3250 × 2% × 2

= $3250 ײ/₁₀₀ × 2

= ^{3250 × 2 × 2}/₁₀₀

= ^{6500 × 2}/₁₀₀

= ¹³⁰⁰⁰/₁₀₀

= $130

Thus, Simple Interest = $130

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 = $3250 + $130

= $3380

Thus, Amount to be paid = $3380 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 = $3250

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3250 + ($3250 × 2% × 2)

= $3250 + ($3250 ײ/₁₀₀ × 2)

= $3250 + (^{3250 × 2 × 2}/₁₀₀)

= $3250 + (^{6500 × 2}/₁₀₀)

= $3250 + (¹³⁰⁰⁰/₁₀₀)

= $3250 + $130 = $3380

Thus, Amount (A) to be paid = $3380 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 $3250, the simple interest in 1 year

= ²/₁₀₀ × 3250

= ^{2 × 3250}/₁₀₀

= ⁶⁵⁰⁰/₁₀₀ = $65

Thus, simple interest in 1 year = $65

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $65 × 2 = $130

Thus, Simple Interest (SI) = $130

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3250 + $130

= $3380

Thus, Amount to be paid = $3380 Answer

Similar Questions

(1) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.

(2) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?

(3) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.

(4) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11765 to clear the loan, then find the time period of the loan.

(5) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?

(6) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.

(7) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(8) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.

(9) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?

(10) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.