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) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.

(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 4% simple interest?

(3) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?

(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?

(5) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8432 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.

(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.

(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 8 years.

(9) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.

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