Simple Interest
Math MCQs

Question :    If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

Correct Answer  $4028

Solution & Explanation

Solution

Given,

Principal (P) = $3800

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) = $3800 × 3% × 2

= $3800 ׳/₁₀₀ × 2

= ^{3800 × 3 × 2}/₁₀₀

= ^{11400 × 2}/₁₀₀

= ²²⁸⁰⁰/₁₀₀

= $228

Thus, Simple Interest = $228

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 = $3800 + $228

= $4028

Thus, Amount to be paid = $4028 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 = $3800

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3800 + ($3800 × 3% × 2)

= $3800 + ($3800 ׳/₁₀₀ × 2)

= $3800 + (^{3800 × 3 × 2}/₁₀₀)

= $3800 + (^{11400 × 2}/₁₀₀)

= $3800 + (²²⁸⁰⁰/₁₀₀)

= $3800 + $228 = $4028

Thus, Amount (A) to be paid = $4028 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 $3800, the simple interest in 1 year

= ³/₁₀₀ × 3800

= ^{3 × 3800}/₁₀₀

= ¹¹⁴⁰⁰/₁₀₀ = $114

Thus, simple interest for 1 year = $114

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $114 × 2 = $228

Thus, Simple Interest (SI) = $228

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3800 + $228

= $4028

Thus, Amount to be paid = $4028 Answer

Similar Questions

(1) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?

(2) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.

(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 2% simple interest?

(5) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.

(6) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?

(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 8 years.

(8) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?

(9) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.

(10) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?