Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?

Correct Answer  $3770

Solution & Explanation

Solution

Given,

Principal (P) = $3250

Rate of Simple Interest (SI) = 8%

Time (t) = 2 years

Thus, Amount (A) = ?

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

Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3250 × 8% × 2

= $3250 ×⁸/₁₀₀ × 2

= ^{3250 × 8 × 2}/₁₀₀

= ^{26000 × 2}/₁₀₀

= ⁵²⁰⁰⁰/₁₀₀

= $520

Thus, Simple Interest = $520

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 = $3250 + $520

= $3770

Thus, Amount to be paid = $3770 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 = $3250

Rate of Simple Interest (SI) or (R) = 8%

And, Time (t) = 2 years

Thus, Amount (A)

= $3250 + ($3250 × 8% × 2)

= $3250 + ($3250 ×⁸/₁₀₀ × 2)

= $3250 + (^{3250 × 8 × 2}/₁₀₀)

= $3250 + (^{26000 × 2}/₁₀₀)

= $3250 + (⁵²⁰⁰⁰/₁₀₀)

= $3250 + $520 = $3770

Thus, Amount (A) to be paid = $3770 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 8%

This, means, $8 per $100 per year

∵ For $100, the simple interest for 1 year = $8

∴ For $1, the simple interest for 1 year = ⁸/₁₀₀

∴ For $3250, the simple interest in 1 year

= ⁸/₁₀₀ × 3250

= ^{8 × 3250}/₁₀₀

= ²⁶⁰⁰⁰/₁₀₀ = $260

Thus, simple interest for 1 year = $260

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $260 × 2 = $520

Thus, Simple Interest (SI) = $520

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3250 + $520

= $3770

Thus, Amount to be paid = $3770 Answer

Similar Questions

(1) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?

(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 4% simple interest.

(3) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(4) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.

(5) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.

(6) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?

(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.

(8) How much loan did Linda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6152.5 to clear it?

(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?

(10) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.