Simple Interest
MCQs Math


Question:     What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?


Correct Answer  $4144

Solution And Explanation

Solution

Given,

Principal (P) = $3700

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) = $3700 × 2% × 6

= $3700 ×2/100 × 6

= 3700 × 2 × 6/100

= 7400 × 6/100

= 44400/100

= $444

Thus, Simple Interest = $444

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 = $3700 + $444

= $4144

Thus, Amount to be paid = $4144 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 = $3700

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

And, Time (t) = 6 years

Thus, Amount (A)

= $3700 + ($3700 × 2% × 6)

= $3700 + ($3700 ×2/100 × 6)

= $3700 + (3700 × 2 × 6/100)

= $3700 + (7400 × 6/100)

= $3700 + (44400/100)

= $3700 + $444 = $4144

Thus, Amount (A) to be paid = $4144 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 $3700, the simple interest in 1 year

= 2/100 × 3700

= 2 × 3700/100

= 7400/100 = $74

Thus, simple interest for 1 year = $74

Therefore, simple interest for 6 years

= Simple interest for 1 year × 6

= $74 × 6 = $444

Thus, Simple Interest (SI) = $444

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $3700 + $444

= $4144

Thus, Amount to be paid = $4144 Answer


Similar Questions

(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.

(2) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.

(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.

(5) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.

(7) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?

(8) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 4 years.

(9) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?

(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.


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