Simple Interest
Math MCQs

Question :    If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3180

Solution & Explanation

Solution

Given,

Principal (P) = $3000

Rate of Simple Interest (SI) = 3%

Time (t) = 2 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3000 × 3% × 2

= $3000 ׳/₁₀₀ × 2

= ^{3000 × 3 × 2}/₁₀₀

= ^{9000 × 2}/₁₀₀

= ¹⁸⁰⁰⁰/₁₀₀

= $180

Thus, Simple Interest = $180

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 = $3000 + $180

= $3180

Thus, Amount to be paid = $3180 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 = $3000

Rate of Simple Interest (SI) or (R) = 3%

And, Time (t) = 2 years

Thus, Amount (A)

= $3000 + ($3000 × 3% × 2)

= $3000 + ($3000 ׳/₁₀₀ × 2)

= $3000 + (^{3000 × 3 × 2}/₁₀₀)

= $3000 + (^{9000 × 2}/₁₀₀)

= $3000 + (¹⁸⁰⁰⁰/₁₀₀)

= $3000 + $180 = $3180

Thus, Amount (A) to be paid = $3180 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 3%

This, means, $3 per $100 per year

∵ For $100, the simple interest for 1 year = $3

∴ For $1, the simple interest for 1 year = ³/₁₀₀

∴ For $3000, the simple interest in 1 year

= ³/₁₀₀ × 3000

= ^{3 × 3000}/₁₀₀

= ⁹⁰⁰⁰/₁₀₀ = $90

Thus, simple interest for 1 year = $90

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $90 × 2 = $180

Thus, Simple Interest (SI) = $180

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3000 + $180

= $3180

Thus, Amount to be paid = $3180 Answer

Similar Questions

(1) 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.

(2) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.

(3) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?

(4) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?

(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.

(6) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.

(7) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.

(9) 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.

(10) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 8 years.