Simple Interest
Math MCQs

Question :    If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3816

Solution & Explanation

Solution

Given,

Principal (P) = $3600

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) = $3600 × 3% × 2

= $3600 ׳/₁₀₀ × 2

= ^{3600 × 3 × 2}/₁₀₀

= ^{10800 × 2}/₁₀₀

= ²¹⁶⁰⁰/₁₀₀

= $216

Thus, Simple Interest = $216

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 = $3600 + $216

= $3816

Thus, Amount to be paid = $3816 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 = $3600

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3600 + ($3600 × 3% × 2)

= $3600 + ($3600 ׳/₁₀₀ × 2)

= $3600 + (^{3600 × 3 × 2}/₁₀₀)

= $3600 + (^{10800 × 2}/₁₀₀)

= $3600 + (²¹⁶⁰⁰/₁₀₀)

= $3600 + $216 = $3816

Thus, Amount (A) to be paid = $3816 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 $3600, the simple interest in 1 year

= ³/₁₀₀ × 3600

= ^{3 × 3600}/₁₀₀

= ¹⁰⁸⁰⁰/₁₀₀ = $108

Thus, simple interest for 1 year = $108

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $108 × 2 = $216

Thus, Simple Interest (SI) = $216

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3600 + $216

= $3816

Thus, Amount to be paid = $3816 Answer

Similar Questions

(1) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.

(3) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.

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

(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?

(6) How much loan did Patricia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5665 to clear it?

(7) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(8) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.

(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?

(10) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.