Simple Interest
Math MCQs

Question :    If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3432

Solution & Explanation

Solution

Given,

Principal (P) = $3300

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) = $3300 × 2% × 2

= $3300 ײ/₁₀₀ × 2

= ^{3300 × 2 × 2}/₁₀₀

= ^{6600 × 2}/₁₀₀

= ¹³²⁰⁰/₁₀₀

= $132

Thus, Simple Interest = $132

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 = $3300 + $132

= $3432

Thus, Amount to be paid = $3432 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 = $3300

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3300 + ($3300 × 2% × 2)

= $3300 + ($3300 ײ/₁₀₀ × 2)

= $3300 + (^{3300 × 2 × 2}/₁₀₀)

= $3300 + (^{6600 × 2}/₁₀₀)

= $3300 + (¹³²⁰⁰/₁₀₀)

= $3300 + $132 = $3432

Thus, Amount (A) to be paid = $3432 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 $3300, the simple interest in 1 year

= ²/₁₀₀ × 3300

= ^{2 × 3300}/₁₀₀

= ⁶⁶⁰⁰/₁₀₀ = $66

Thus, simple interest in 1 year = $66

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $66 × 2 = $132

Thus, Simple Interest (SI) = $132

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3300 + $132

= $3432

Thus, Amount to be paid = $3432 Answer

Similar Questions

(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?

(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.

(3) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.

(4) In how much time a principal of $3000 will amount to $3180 at a simple interest of 3% per annum?

(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.

(6) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?

(7) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 7 years.

(9) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(10) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.