Simple Interest
Math MCQs

Question :    If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3604

Solution & Explanation

Solution

Given,

Principal (P) = $3400

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) = $3400 × 3% × 2

= $3400 ׳/₁₀₀ × 2

= ^{3400 × 3 × 2}/₁₀₀

= ^{10200 × 2}/₁₀₀

= ²⁰⁴⁰⁰/₁₀₀

= $204

Thus, Simple Interest = $204

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 = $3400 + $204

= $3604

Thus, Amount to be paid = $3604 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 = $3400

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3400 + ($3400 × 3% × 2)

= $3400 + ($3400 ׳/₁₀₀ × 2)

= $3400 + (^{3400 × 3 × 2}/₁₀₀)

= $3400 + (^{10200 × 2}/₁₀₀)

= $3400 + (²⁰⁴⁰⁰/₁₀₀)

= $3400 + $204 = $3604

Thus, Amount (A) to be paid = $3604 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 $3400, the simple interest in 1 year

= ³/₁₀₀ × 3400

= ^{3 × 3400}/₁₀₀

= ¹⁰²⁰⁰/₁₀₀ = $102

Thus, simple interest for 1 year = $102

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $102 × 2 = $204

Thus, Simple Interest (SI) = $204

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3400 + $204

= $3604

Thus, Amount to be paid = $3604 Answer

Similar Questions

(1) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 7 years.

(3) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(4) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.

(5) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?

(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.

(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.

(8) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?

(9) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?

(10) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.