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) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(5) How much loan did Christopher borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6600 to clear it?
(6) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.
(7) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7421 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?