Simple Interest
Math MCQs

Question :    If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3848

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 2% × 2

= $3700 ײ/₁₀₀ × 2

= ^{3700 × 2 × 2}/₁₀₀

= ^{7400 × 2}/₁₀₀

= ¹⁴⁸⁰⁰/₁₀₀

= $148

Thus, Simple Interest = $148

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 = $3700 + $148

= $3848

Thus, Amount to be paid = $3848 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 = $3700

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3700 + ($3700 × 2% × 2)

= $3700 + ($3700 ײ/₁₀₀ × 2)

= $3700 + (^{3700 × 2 × 2}/₁₀₀)

= $3700 + (^{7400 × 2}/₁₀₀)

= $3700 + (¹⁴⁸⁰⁰/₁₀₀)

= $3700 + $148 = $3848

Thus, Amount (A) to be paid = $3848 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 $3700, the simple interest in 1 year

= ²/₁₀₀ × 3700

= ^{2 × 3700}/₁₀₀

= ⁷⁴⁰⁰/₁₀₀ = $74

Thus, simple interest in 1 year = $74

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $74 × 2 = $148

Thus, Simple Interest (SI) = $148

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $148

= $3848

Thus, Amount to be paid = $3848 Answer

Similar Questions

(1) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.

(2) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.

(4) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 7 years.

(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.

(7) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?

(8) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?

(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?

(10) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.