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) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?
(2) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?
(4) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(6) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 5% simple interest?
(8) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.
(9) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 4 years.