Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?

Correct Answer  $4161

Solution & Explanation

Solution

Given,

Principal (P) = $3650

Rate of Simple Interest (SI) = 7%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3650 × 7% × 2

= $3650 ×⁷/₁₀₀ × 2

= ^{3650 × 7 × 2}/₁₀₀

= ^{25550 × 2}/₁₀₀

= ⁵¹¹⁰⁰/₁₀₀

= $511

Thus, Simple Interest = $511

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 = $3650 + $511

= $4161

Thus, Amount to be paid = $4161 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 = $3650

Rate of Simple Interest (SI) or (R) = 7%

And, Time (t) = 2 years

Thus, Amount (A)

= $3650 + ($3650 × 7% × 2)

= $3650 + ($3650 ×⁷/₁₀₀ × 2)

= $3650 + (^{3650 × 7 × 2}/₁₀₀)

= $3650 + (^{25550 × 2}/₁₀₀)

= $3650 + (⁵¹¹⁰⁰/₁₀₀)

= $3650 + $511 = $4161

Thus, Amount (A) to be paid = $4161 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 7%

This, means, $7 per $100 per year

∵ For $100, the simple interest for 1 year = $7

∴ For $1, the simple interest for 1 year = ⁷/₁₀₀

∴ For $3650, the simple interest in 1 year

= ⁷/₁₀₀ × 3650

= ^{7 × 3650}/₁₀₀

= ²⁵⁵⁵⁰/₁₀₀ = $255.5

Thus, simple interest for 1 year = $255.5

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $255.5 × 2 = $511

Thus, Simple Interest (SI) = $511

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3650 + $511

= $4161

Thus, Amount to be paid = $4161 Answer

Similar Questions

(1) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.

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

(3) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.

(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.

(5) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

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

(7) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.

(8) If Sandra paid $5340 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(9) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.

(10) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.