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) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?

(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 7 years.

(3) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(4) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 5% simple interest?

(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.

(6) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?

(7) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?

(8) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 4 years.

(9) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.

(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 7 years.