Simple Interest
Math MCQs

Question :    What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?

Correct Answer  $3795

Solution & Explanation

Solution

Given,

Principal (P) = $3450

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) = $3450 × 2% × 5

= $3450 ײ/₁₀₀ × 5

= ^{3450 × 2 × 5}/₁₀₀

= ^{6900 × 5}/₁₀₀

= ³⁴⁵⁰⁰/₁₀₀

= $345

Thus, Simple Interest = $345

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 = $3450 + $345

= $3795

Thus, Amount to be paid = $3795 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 = $3450

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3450 + ($3450 × 2% × 5)

= $3450 + ($3450 ײ/₁₀₀ × 5)

= $3450 + (^{3450 × 2 × 5}/₁₀₀)

= $3450 + (^{6900 × 5}/₁₀₀)

= $3450 + (³⁴⁵⁰⁰/₁₀₀)

= $3450 + $345 = $3795

Thus, Amount (A) to be paid = $3795 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 $3450, the simple interest in 1 year

= ²/₁₀₀ × 3450

= ^{2 × 3450}/₁₀₀

= ⁶⁹⁰⁰/₁₀₀ = $69

Thus, simple interest for 1 year = $69

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $69 × 5 = $345

Thus, Simple Interest (SI) = $345

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3450 + $345

= $3795

Thus, Amount to be paid = $3795 Answer

Similar Questions

(1) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.

(2) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?

(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.

(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.

(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.

(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?

(7) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?

(8) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.

(9) If Sarah paid $4466 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(10) 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.