Simple Interest
Math MCQs

Question :    What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?

Correct Answer  $3905

Solution & Explanation

Solution

Given,

Principal (P) = $3550

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) = $3550 × 2% × 5

= $3550 ײ/₁₀₀ × 5

= ^{3550 × 2 × 5}/₁₀₀

= ^{7100 × 5}/₁₀₀

= ³⁵⁵⁰⁰/₁₀₀

= $355

Thus, Simple Interest = $355

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 = $3550 + $355

= $3905

Thus, Amount to be paid = $3905 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 = $3550

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3550 + ($3550 × 2% × 5)

= $3550 + ($3550 ײ/₁₀₀ × 5)

= $3550 + (^{3550 × 2 × 5}/₁₀₀)

= $3550 + (^{7100 × 5}/₁₀₀)

= $3550 + (³⁵⁵⁰⁰/₁₀₀)

= $3550 + $355 = $3905

Thus, Amount (A) to be paid = $3905 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 $3550, the simple interest in 1 year

= ²/₁₀₀ × 3550

= ^{2 × 3550}/₁₀₀

= ⁷¹⁰⁰/₁₀₀ = $71

Thus, simple interest for 1 year = $71

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $71 × 5 = $355

Thus, Simple Interest (SI) = $355

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3550 + $355

= $3905

Thus, Amount to be paid = $3905 Answer

Similar Questions

(1) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 8 years.

(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.

(3) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?

(4) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?

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

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

(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.

(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?

(9) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.