Simple Interest
Math MCQs

Question :    If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3710

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 3% × 2

= $3500 ׳/₁₀₀ × 2

= ^{3500 × 3 × 2}/₁₀₀

= ^{10500 × 2}/₁₀₀

= ²¹⁰⁰⁰/₁₀₀

= $210

Thus, Simple Interest = $210

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 = $3500 + $210

= $3710

Thus, Amount to be paid = $3710 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 = $3500

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3500 + ($3500 × 3% × 2)

= $3500 + ($3500 ׳/₁₀₀ × 2)

= $3500 + (^{3500 × 3 × 2}/₁₀₀)

= $3500 + (^{10500 × 2}/₁₀₀)

= $3500 + (²¹⁰⁰⁰/₁₀₀)

= $3500 + $210 = $3710

Thus, Amount (A) to be paid = $3710 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 $3500, the simple interest in 1 year

= ³/₁₀₀ × 3500

= ^{3 × 3500}/₁₀₀

= ¹⁰⁵⁰⁰/₁₀₀ = $105

Thus, simple interest for 1 year = $105

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $105 × 2 = $210

Thus, Simple Interest (SI) = $210

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $210

= $3710

Thus, Amount to be paid = $3710 Answer

Similar Questions

(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.

(2) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?

(3) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?

(4) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.

(5) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?

(6) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.

(7) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?

(8) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.

(9) If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(10) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?