Simple Interest
Math MCQs

Question :    What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?

Correct Answer  $3850

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 2% × 5

= $3500 ײ/₁₀₀ × 5

= ^{3500 × 2 × 5}/₁₀₀

= ^{7000 × 5}/₁₀₀

= ³⁵⁰⁰⁰/₁₀₀

= $350

Thus, Simple Interest = $350

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 = $3500 + $350

= $3850

Thus, Amount to be paid = $3850 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 = $3500

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3500 + ($3500 × 2% × 5)

= $3500 + ($3500 ײ/₁₀₀ × 5)

= $3500 + (^{3500 × 2 × 5}/₁₀₀)

= $3500 + (^{7000 × 5}/₁₀₀)

= $3500 + (³⁵⁰⁰⁰/₁₀₀)

= $3500 + $350 = $3850

Thus, Amount (A) to be paid = $3850 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 $3500, the simple interest in 1 year

= ²/₁₀₀ × 3500

= ^{2 × 3500}/₁₀₀

= ⁷⁰⁰⁰/₁₀₀ = $70

Thus, simple interest for 1 year = $70

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $70 × 5 = $350

Thus, Simple Interest (SI) = $350

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $350

= $3850

Thus, Amount to be paid = $3850 Answer

Similar Questions

(1) If Patricia borrowed $3150 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 8% simple interest.

(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 5% simple interest?

(4) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.

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

(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.

(7) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.

(8) What amount does William have to pay after 6 years if he takes a loan of $3500 at 5% simple interest?

(9) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.