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) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.

(2) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?

(3) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.

(4) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?

(5) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 10% simple interest?

(6) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.

(7) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.

(8) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 4% simple interest?

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

(10) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.