Question:
If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3328
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 2% × 2
= $3200 ×2/100 × 2
= 3200 × 2 × 2/100
= 6400 × 2/100
= 12800/100
= $128
Thus, Simple Interest = $128
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 = $3200 + $128
= $3328
Thus, Amount to be paid = $3328 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 = $3200
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 2% × 2)
= $3200 + ($3200 ×2/100 × 2)
= $3200 + (3200 × 2 × 2/100)
= $3200 + (6400 × 2/100)
= $3200 + (12800/100)
= $3200 + $128 = $3328
Thus, Amount (A) to be paid = $3328 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 $3200, the simple interest in 1 year
= 2/100 × 3200
= 2 × 3200/100
= 6400/100 = $64
Thus, simple interest in 1 year = $64
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $64 × 2 = $128
Thus, Simple Interest (SI) = $128
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $128
= $3328
Thus, Amount to be paid = $3328 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.
(3) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 10% simple interest?
(4) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(6) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(7) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(9) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.