Simple Interest
Math MCQs

Question :    What amount does John have to pay after 5 years if he takes a loan of $3200 at 2% simple interest?

Correct Answer  $3520

Solution & Explanation

Solution

Given,

Principal (P) = $3200

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) = $3200 × 2% × 5

= $3200 ײ/₁₀₀ × 5

= ^{3200 × 2 × 5}/₁₀₀

= ^{6400 × 5}/₁₀₀

= ³²⁰⁰⁰/₁₀₀

= $320

Thus, Simple Interest = $320

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 = $3200 + $320

= $3520

Thus, Amount to be paid = $3520 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 = $3200

Rate of Simple Interest (SI) or (R) = 2%

And, Time (t) = 5 years

Thus, Amount (A)

= $3200 + ($3200 × 2% × 5)

= $3200 + ($3200 ײ/₁₀₀ × 5)

= $3200 + (^{3200 × 2 × 5}/₁₀₀)

= $3200 + (^{6400 × 5}/₁₀₀)

= $3200 + (³²⁰⁰⁰/₁₀₀)

= $3200 + $320 = $3520

Thus, Amount (A) to be paid = $3520 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 $3200, the simple interest in 1 year

= ²/₁₀₀ × 3200

= ^{2 × 3200}/₁₀₀

= ⁶⁴⁰⁰/₁₀₀ = $64

Thus, simple interest for 1 year = $64

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $64 × 5 = $320

Thus, Simple Interest (SI) = $320

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3200 + $320

= $3520

Thus, Amount to be paid = $3520 Answer

Similar Questions

(1) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.

(2) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?

(3) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.

(4) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?

(5) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.

(6) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?

(7) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.

(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 7 years.

(9) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.

(10) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.