Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?

Correct Answer  $3465

Solution & Explanation

Solution

Given,

Principal (P) = $3150

Rate of Simple Interest (SI) = 5%

Time (t) = 2 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3150 × 5% × 2

= $3150 ×⁵/₁₀₀ × 2

= ^{3150 × 5 × 2}/₁₀₀

= ^{15750 × 2}/₁₀₀

= ³¹⁵⁰⁰/₁₀₀

= $315

Thus, Simple Interest = $315

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 = $3150 + $315

= $3465

Thus, Amount to be paid = $3465 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 = $3150

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 2 years

Thus, Amount (A)

= $3150 + ($3150 × 5% × 2)

= $3150 + ($3150 ×⁵/₁₀₀ × 2)

= $3150 + (^{3150 × 5 × 2}/₁₀₀)

= $3150 + (^{15750 × 2}/₁₀₀)

= $3150 + (³¹⁵⁰⁰/₁₀₀)

= $3150 + $315 = $3465

Thus, Amount (A) to be paid = $3465 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $3150, the simple interest in 1 year

= ⁵/₁₀₀ × 3150

= ^{5 × 3150}/₁₀₀

= ¹⁵⁷⁵⁰/₁₀₀ = $157.5

Thus, simple interest for 1 year = $157.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $157.5 × 2 = $315

Thus, Simple Interest (SI) = $315

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3150 + $315

= $3465

Thus, Amount to be paid = $3465 Answer

Similar Questions

(1) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.

(2) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?

(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.

(5) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.

(6) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?

(7) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?

(8) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9384 to clear the loan, then find the time period of the loan.

(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?

(10) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?