Simple Interest
Math MCQs

Question :    If Richard borrowed $3600 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3744

Solution & Explanation

Solution

Given,

Principal (P) = $3600

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) = $3600 × 2% × 2

= $3600 ײ/₁₀₀ × 2

= ^{3600 × 2 × 2}/₁₀₀

= ^{7200 × 2}/₁₀₀

= ¹⁴⁴⁰⁰/₁₀₀

= $144

Thus, Simple Interest = $144

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 = $3600 + $144

= $3744

Thus, Amount to be paid = $3744 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 = $3600

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3600 + ($3600 × 2% × 2)

= $3600 + ($3600 ײ/₁₀₀ × 2)

= $3600 + (^{3600 × 2 × 2}/₁₀₀)

= $3600 + (^{7200 × 2}/₁₀₀)

= $3600 + (¹⁴⁴⁰⁰/₁₀₀)

= $3600 + $144 = $3744

Thus, Amount (A) to be paid = $3744 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 $3600, the simple interest in 1 year

= ²/₁₀₀ × 3600

= ^{2 × 3600}/₁₀₀

= ⁷²⁰⁰/₁₀₀ = $72

Thus, simple interest in 1 year = $72

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $72 × 2 = $144

Thus, Simple Interest (SI) = $144

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3600 + $144

= $3744

Thus, Amount to be paid = $3744 Answer

Similar Questions

(1) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?

(2) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.

(3) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.

(4) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9231 to clear the loan, then find the time period of the loan.

(5) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?

(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.

(7) If Margaret paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(8) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.

(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 3 years.

(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.