Question:
If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3120
Solution And Explanation
Solution
Given,
Principal (P) = $3000
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) = $3000 × 2% × 2
= $3000 ×2/100 × 2
= 3000 × 2 × 2/100
= 6000 × 2/100
= 12000/100
= $120
Thus, Simple Interest = $120
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 = $3000 + $120
= $3120
Thus, Amount to be paid = $3120 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 = $3000
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 2% × 2)
= $3000 + ($3000 ×2/100 × 2)
= $3000 + (3000 × 2 × 2/100)
= $3000 + (6000 × 2/100)
= $3000 + (12000/100)
= $3000 + $120 = $3120
Thus, Amount (A) to be paid = $3120 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 $3000, the simple interest in 1 year
= 2/100 × 3000
= 2 × 3000/100
= 6000/100 = $60
Thus, simple interest in 1 year = $60
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $60 × 2 = $120
Thus, Simple Interest (SI) = $120
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $120
= $3120
Thus, Amount to be paid = $3120 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(2) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 8 years.
(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(6) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
(9) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.