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) What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?

(2) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.

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

(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 7% simple interest.

(5) Betty had to pay $4760 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(6) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.

(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.

(8) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.

(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?