Simple Interest
Math MCQs

Question :    If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $3922

Solution & Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 3% × 2

= $3700 ׳/₁₀₀ × 2

= ^{3700 × 3 × 2}/₁₀₀

= ^{11100 × 2}/₁₀₀

= ²²²⁰⁰/₁₀₀

= $222

Thus, Simple Interest = $222

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 = $3700 + $222

= $3922

Thus, Amount to be paid = $3922 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 = $3700

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3700 + ($3700 × 3% × 2)

= $3700 + ($3700 ׳/₁₀₀ × 2)

= $3700 + (^{3700 × 3 × 2}/₁₀₀)

= $3700 + (^{11100 × 2}/₁₀₀)

= $3700 + (²²²⁰⁰/₁₀₀)

= $3700 + $222 = $3922

Thus, Amount (A) to be paid = $3922 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 $3700, the simple interest in 1 year

= ³/₁₀₀ × 3700

= ^{3 × 3700}/₁₀₀

= ¹¹¹⁰⁰/₁₀₀ = $111

Thus, simple interest for 1 year = $111

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $111 × 2 = $222

Thus, Simple Interest (SI) = $222

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $222

= $3922

Thus, Amount to be paid = $3922 Answer

Similar Questions

(1) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.

(2) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?

(3) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.

(4) In how much time a principal of $3000 will amount to $3600 at a simple interest of 5% per annum?

(5) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.

(6) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.

(8) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.

(9) How much loan did Joshua borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7935 to clear it?

(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?