Simple Interest
Math MCQs

Question :    What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 2% simple interest?

Correct Answer  $3465

Solution & Explanation

Solution

Given,

Principal (P) = $3150

Rate of Simple Interest (SI) = 2%

Time (t) = 5 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) = $3150 × 2% × 5

= $3150 ײ/₁₀₀ × 5

= ^{3150 × 2 × 5}/₁₀₀

= ^{6300 × 5}/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) = 2%

And, Time (t) = 5 years

Thus, Amount (A)

= $3150 + ($3150 × 2% × 5)

= $3150 + ($3150 ײ/₁₀₀ × 5)

= $3150 + (^{3150 × 2 × 5}/₁₀₀)

= $3150 + (^{6300 × 5}/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 = 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 $3150, the simple interest in 1 year

= ²/₁₀₀ × 3150

= ^{2 × 3150}/₁₀₀

= ⁶³⁰⁰/₁₀₀ = $63

Thus, simple interest for 1 year = $63

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $63 × 5 = $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) Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 8 years.

(2) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.

(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?

(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.

(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?

(6) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.

(7) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?

(8) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?

(9) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 10% simple interest?

(10) John had to pay $3488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.