Simple Interest
Math MCQs

Question :    If Patricia borrowed $3150 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3339

Solution & Explanation

Solution

Given,

Principal (P) = $3150

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) = $3150 × 3% × 2

= $3150 ׳/₁₀₀ × 2

= ^{3150 × 3 × 2}/₁₀₀

= ^{9450 × 2}/₁₀₀

= ¹⁸⁹⁰⁰/₁₀₀

= $189

Thus, Simple Interest = $189

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 = $3150 + $189

= $3339

Thus, Amount to be paid = $3339 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 = $3150

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3150 + ($3150 × 3% × 2)

= $3150 + ($3150 ׳/₁₀₀ × 2)

= $3150 + (^{3150 × 3 × 2}/₁₀₀)

= $3150 + (^{9450 × 2}/₁₀₀)

= $3150 + (¹⁸⁹⁰⁰/₁₀₀)

= $3150 + $189 = $3339

Thus, Amount (A) to be paid = $3339 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 $3150, the simple interest in 1 year

= ³/₁₀₀ × 3150

= ^{3 × 3150}/₁₀₀

= ⁹⁴⁵⁰/₁₀₀ = $94.5

Thus, simple interest for 1 year = $94.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $94.5 × 2 = $189

Thus, Simple Interest (SI) = $189

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3150 + $189

= $3339

Thus, Amount to be paid = $3339 Answer

Similar Questions

(1) What amount will be due after 2 years if James borrowed a sum of $3000 at a 6% simple interest?

(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?

(3) How much loan did Sandra borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8062.5 to clear it?

(4) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.

(5) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.

(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 10% simple interest?

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

(8) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.

(9) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.

(10) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.