Simple Interest
Math MCQs

Question :    What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?

Correct Answer  $3920

Solution & Explanation

Solution

Given,

Principal (P) = $3500

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) = $3500 × 2% × 6

= $3500 ײ/₁₀₀ × 6

= ^{3500 × 2 × 6}/₁₀₀

= ^{7000 × 6}/₁₀₀

= ⁴²⁰⁰⁰/₁₀₀

= $420

Thus, Simple Interest = $420

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 + $420

= $3920

Thus, Amount to be paid = $3920 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) = 6 years

Thus, Amount (A)

= $3500 + ($3500 × 2% × 6)

= $3500 + ($3500 ײ/₁₀₀ × 6)

= $3500 + (^{3500 × 2 × 6}/₁₀₀)

= $3500 + (^{7000 × 6}/₁₀₀)

= $3500 + (⁴²⁰⁰⁰/₁₀₀)

= $3500 + $420 = $3920

Thus, Amount (A) to be paid = $3920 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 6 years

= Simple interest for 1 year × 6

= $70 × 6 = $420

Thus, Simple Interest (SI) = $420

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3500 + $420

= $3920

Thus, Amount to be paid = $3920 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.

(2) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.

(3) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(4) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(5) If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.

(7) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) If Andrew paid $5184 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(9) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.

(10) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.