Simple Interest
Math MCQs

Question :    If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $4004

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 2% × 2

= $3850 ײ/₁₀₀ × 2

= ^{3850 × 2 × 2}/₁₀₀

= ^{7700 × 2}/₁₀₀

= ¹⁵⁴⁰⁰/₁₀₀

= $154

Thus, Simple Interest = $154

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 = $3850 + $154

= $4004

Thus, Amount to be paid = $4004 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 = $3850

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 2)

= $3850 + ($3850 ײ/₁₀₀ × 2)

= $3850 + (^{3850 × 2 × 2}/₁₀₀)

= $3850 + (^{7700 × 2}/₁₀₀)

= $3850 + (¹⁵⁴⁰⁰/₁₀₀)

= $3850 + $154 = $4004

Thus, Amount (A) to be paid = $4004 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 $3850, the simple interest in 1 year

= ²/₁₀₀ × 3850

= ^{2 × 3850}/₁₀₀

= ⁷⁷⁰⁰/₁₀₀ = $77

Thus, simple interest in 1 year = $77

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $77 × 2 = $154

Thus, Simple Interest (SI) = $154

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $154

= $4004

Thus, Amount to be paid = $4004 Answer

Similar Questions

(1) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?

(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.

(3) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?

(4) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.

(6) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.

(7) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?

(9) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.

(10) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.