Simple Interest
MCQs Math


Question:     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.


Correct Answer  $3432

Solution And Explanation

Solution

Given,

Principal (P) = $3300

Rate of Simple Interest (SI) = 2%

Time (t) = 2 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) = $3300 × 2% × 2

= $3300 ×2/100 × 2

= 3300 × 2 × 2/100

= 6600 × 2/100

= 13200/100

= $132

Thus, Simple Interest = $132

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 = $3300 + $132

= $3432

Thus, Amount to be paid = $3432 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 = $3300

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

And, Time (t) = 2 years

Thus, Amount (A)

= $3300 + ($3300 × 2% × 2)

= $3300 + ($3300 ×2/100 × 2)

= $3300 + (3300 × 2 × 2/100)

= $3300 + (6600 × 2/100)

= $3300 + (13200/100)

= $3300 + $132 = $3432

Thus, Amount (A) to be paid = $3432 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 in 1 year = $2

∴ For $1, the simple interest in 1 year = 2/100

∴ For $3300, the simple interest in 1 year

= 2/100 × 3300

= 2 × 3300/100

= 6600/100 = $66

Thus, simple interest in 1 year = $66

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $66 × 2 = $132

Thus, Simple Interest (SI) = $132

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3300 + $132

= $3432

Thus, Amount to be paid = $3432 Answer


Similar Questions

(1) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.

(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.

(3) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?

(4) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?

(5) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.

(6) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.

(8) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.

(9) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.

(10) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.


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