Simple Interest
Math MCQs

Question :    Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 3 years.

Correct Answer  $3445

Solution & Explanation

Solution

Given,

Principal (P) = $3250

Rate of Simple Interest (SI) = 2%

Time (t) = 3 years

Thus, Amount (A) = ?

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

Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 3

= $3250 ײ/₁₀₀ × 3

= ^{3250 × 2 × 3}/₁₀₀

= ^{6500 × 3}/₁₀₀

= ¹⁹⁵⁰⁰/₁₀₀

= $195

Thus, Simple Interest = $195

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 + $195

= $3445

Thus, Amount to be paid = $3445 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) = 2%

And, Time (t) = 3 years

Thus, Amount (A)

= $3250 + ($3250 × 2% × 3)

= $3250 + ($3250 ײ/₁₀₀ × 3)

= $3250 + (^{3250 × 2 × 3}/₁₀₀)

= $3250 + (^{6500 × 3}/₁₀₀)

= $3250 + (¹⁹⁵⁰⁰/₁₀₀)

= $3250 + $195 = $3445

Thus, Amount (A) to be paid = $3445 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 2%

This, means, $2 per $100 per year

∵ For $100, the simple interest for 1 year = $2

∴ For $1, the simple interest for 1 year = ²/₁₀₀

∴ For $3250, the simple interest in 1 year

= ²/₁₀₀ × 3250

= ^{2 × 3250}/₁₀₀

= ⁶⁵⁰⁰/₁₀₀ = $65

Thus, simple interest for 1 year = $65

Therefore, simple interest for 3 years

= Simple interest for 1 year × 3

= $65 × 3 = $195

Thus, Simple Interest (SI) = $195

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3250 + $195

= $3445

Thus, Amount to be paid = $3445 Answer

Similar Questions

(1) Donna had to pay $5286.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(3) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?

(4) What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?

(5) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.

(6) If Sandra paid $5162 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.

(8) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.

(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 3 years.