Simple Interest
Math MCQs

Question :    What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?

Correct Answer  $4235

Solution & Explanation

Solution

Given,

Principal (P) = $3850

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) = $3850 × 2% × 5

= $3850 ײ/₁₀₀ × 5

= ^{3850 × 2 × 5}/₁₀₀

= ^{7700 × 5}/₁₀₀

= ³⁸⁵⁰⁰/₁₀₀

= $385

Thus, Simple Interest = $385

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 = $3850 + $385

= $4235

Thus, Amount to be paid = $4235 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 = $3850

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

And, Time (t) = 5 years

Thus, Amount (A)

= $3850 + ($3850 × 2% × 5)

= $3850 + ($3850 ײ/₁₀₀ × 5)

= $3850 + (^{3850 × 2 × 5}/₁₀₀)

= $3850 + (^{7700 × 5}/₁₀₀)

= $3850 + (³⁸⁵⁰⁰/₁₀₀)

= $3850 + $385 = $4235

Thus, Amount (A) to be paid = $4235 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 $3850, the simple interest in 1 year

= ²/₁₀₀ × 3850

= ^{2 × 3850}/₁₀₀

= ⁷⁷⁰⁰/₁₀₀ = $77

Thus, simple interest for 1 year = $77

Therefore, simple interest for 5 years

= Simple interest for 1 year × 5

= $77 × 5 = $385

Thus, Simple Interest (SI) = $385

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3850 + $385

= $4235

Thus, Amount to be paid = $4235 Answer

Similar Questions

(1) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?

(2) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?

(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?

(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 8% simple interest?

(6) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 7 years.

(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.

(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.

(10) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.