Question:
If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3172
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 2% × 2
= $3050 ×2/100 × 2
= 3050 × 2 × 2/100
= 6100 × 2/100
= 12200/100
= $122
Thus, Simple Interest = $122
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 = $3050 + $122
= $3172
Thus, Amount to be paid = $3172 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 = $3050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 2% × 2)
= $3050 + ($3050 ×2/100 × 2)
= $3050 + (3050 × 2 × 2/100)
= $3050 + (6100 × 2/100)
= $3050 + (12200/100)
= $3050 + $122 = $3172
Thus, Amount (A) to be paid = $3172 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 $3050, the simple interest in 1 year
= 2/100 × 3050
= 2 × 3050/100
= 6100/100 = $61
Thus, simple interest in 1 year = $61
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $61 × 2 = $122
Thus, Simple Interest (SI) = $122
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $122
= $3172
Thus, Amount to be paid = $3172 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(3) How much loan did David borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6480 to clear it?
(4) If Richard paid $4176 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 2% simple interest?
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
(9) If Anthony paid $4816 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.