Simple Interest
Math MCQs

Question :    Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.

Correct Answer  $6300

Solution & Explanation

Solution

Given,

Principal (P) = $5250

Rate of Simple Interest (SI) = 2%

Time (t) = 10 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) = $5250 × 2% × 10

= $5250 ײ/₁₀₀ × 10

= ^{5250 × 2 × 10}/₁₀₀

= ^{10500 × 10}/₁₀₀

= ¹⁰⁵⁰⁰⁰/₁₀₀

= $1050

Thus, Simple Interest = $1050

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 = $5250 + $1050

= $6300

Thus, Amount to be paid = $6300 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 = $5250

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

And, Time (t) = 10 years

Thus, Amount (A)

= $5250 + ($5250 × 2% × 10)

= $5250 + ($5250 ײ/₁₀₀ × 10)

= $5250 + (^{5250 × 2 × 10}/₁₀₀)

= $5250 + (^{10500 × 10}/₁₀₀)

= $5250 + (¹⁰⁵⁰⁰⁰/₁₀₀)

= $5250 + $1050 = $6300

Thus, Amount (A) to be paid = $6300 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 $5250, the simple interest in 1 year

= ²/₁₀₀ × 5250

= ^{2 × 5250}/₁₀₀

= ¹⁰⁵⁰⁰/₁₀₀ = $105

Thus, simple interest for 1 year = $105

Therefore, simple interest for 10 years

= Simple interest for 1 year × 10

= $105 × 10 = $1050

Thus, Simple Interest (SI) = $1050

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $5250 + $1050

= $6300

Thus, Amount to be paid = $6300 Answer

Similar Questions

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

(2) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?

(3) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?

(4) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(5) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.

(6) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(7) How much loan did Brian borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7920 to clear it?

(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 8 years.

(9) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 4 years.

(10) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.