Simple Interest
Math MCQs

Question :    What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?

Correct Answer  $3640

Solution & Explanation

Solution

Given,

Principal (P) = $3250

Rate of Simple Interest (SI) = 2%

Time (t) = 6 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) = $3250 × 2% × 6

= $3250 ײ/₁₀₀ × 6

= ^{3250 × 2 × 6}/₁₀₀

= ^{6500 × 6}/₁₀₀

= ³⁹⁰⁰⁰/₁₀₀

= $390

Thus, Simple Interest = $390

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 = $3250 + $390

= $3640

Thus, Amount to be paid = $3640 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 = $3250

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3250 + ($3250 × 2% × 6)

= $3250 + ($3250 ײ/₁₀₀ × 6)

= $3250 + (^{3250 × 2 × 6}/₁₀₀)

= $3250 + (^{6500 × 6}/₁₀₀)

= $3250 + (³⁹⁰⁰⁰/₁₀₀)

= $3250 + $390 = $3640

Thus, Amount (A) to be paid = $3640 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 $3250, the simple interest in 1 year

= ²/₁₀₀ × 3250

= ^{2 × 3250}/₁₀₀

= ⁶⁵⁰⁰/₁₀₀ = $65

Thus, simple interest for 1 year = $65

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $65 × 6 = $390

Thus, Simple Interest (SI) = $390

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3250 + $390

= $3640

Thus, Amount to be paid = $3640 Answer

Similar Questions

(1) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?

(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?

(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.

(4) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.

(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 3 years.

(6) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.

(7) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?

(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.

(9) How much loan did Joseph borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6840 to clear it?

(10) Steven had to pay $4876 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.