Question:
If Robert borrowed $3100 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3224
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 2% × 2
= $3100 ×2/100 × 2
= 3100 × 2 × 2/100
= 6200 × 2/100
= 12400/100
= $124
Thus, Simple Interest = $124
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 = $3100 + $124
= $3224
Thus, Amount to be paid = $3224 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 = $3100
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 2% × 2)
= $3100 + ($3100 ×2/100 × 2)
= $3100 + (3100 × 2 × 2/100)
= $3100 + (6200 × 2/100)
= $3100 + (12400/100)
= $3100 + $124 = $3224
Thus, Amount (A) to be paid = $3224 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 $3100, the simple interest in 1 year
= 2/100 × 3100
= 2 × 3100/100
= 6200/100 = $62
Thus, simple interest in 1 year = $62
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $62 × 2 = $124
Thus, Simple Interest (SI) = $124
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $124
= $3224
Thus, Amount to be paid = $3224 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(3) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?
(4) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?
(5) Elizabeth had to pay $3864 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(9) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(10) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.