Simple Interest
Math MCQs

Question :    What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?

Correct Answer  $3976

Solution & Explanation

Solution

Given,

Principal (P) = $3550

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) = $3550 × 2% × 6

= $3550 ײ/₁₀₀ × 6

= ^{3550 × 2 × 6}/₁₀₀

= ^{7100 × 6}/₁₀₀

= ⁴²⁶⁰⁰/₁₀₀

= $426

Thus, Simple Interest = $426

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 + $426

= $3976

Thus, Amount to be paid = $3976 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) = 6 years

Thus, Amount (A)

= $3550 + ($3550 × 2% × 6)

= $3550 + ($3550 ײ/₁₀₀ × 6)

= $3550 + (^{3550 × 2 × 6}/₁₀₀)

= $3550 + (^{7100 × 6}/₁₀₀)

= $3550 + (⁴²⁶⁰⁰/₁₀₀)

= $3550 + $426 = $3976

Thus, Amount (A) to be paid = $3976 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 6 years

= Simple interest for 1 year × 6

= $71 × 6 = $426

Thus, Simple Interest (SI) = $426

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3550 + $426

= $3976

Thus, Amount to be paid = $3976 Answer

Similar Questions

(1) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.

(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 8 years.

(3) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.

(4) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(5) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?

(6) What amount will be due after 2 years if David borrowed a sum of $3200 at a 6% simple interest?

(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 7% simple interest?

(8) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?

(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.

(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?