Simple Interest
Math MCQs

Question :    If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3588

Solution & Explanation

Solution

Given,

Principal (P) = $3450

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) = $3450 × 2% × 2

= $3450 ײ/₁₀₀ × 2

= ^{3450 × 2 × 2}/₁₀₀

= ^{6900 × 2}/₁₀₀

= ¹³⁸⁰⁰/₁₀₀

= $138

Thus, Simple Interest = $138

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 = $3450 + $138

= $3588

Thus, Amount to be paid = $3588 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 = $3450

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3450 + ($3450 × 2% × 2)

= $3450 + ($3450 ײ/₁₀₀ × 2)

= $3450 + (^{3450 × 2 × 2}/₁₀₀)

= $3450 + (^{6900 × 2}/₁₀₀)

= $3450 + (¹³⁸⁰⁰/₁₀₀)

= $3450 + $138 = $3588

Thus, Amount (A) to be paid = $3588 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 $3450, the simple interest in 1 year

= ²/₁₀₀ × 3450

= ^{2 × 3450}/₁₀₀

= ⁶⁹⁰⁰/₁₀₀ = $69

Thus, simple interest in 1 year = $69

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $69 × 2 = $138

Thus, Simple Interest (SI) = $138

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $138

= $3588

Thus, Amount to be paid = $3588 Answer

Similar Questions

(1) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.

(2) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?

(3) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?

(4) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(5) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?

(7) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?

(8) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?

(9) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.

(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?