Question:
If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3380
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 2% × 2
= $3250 ×2/100 × 2
= 3250 × 2 × 2/100
= 6500 × 2/100
= 13000/100
= $130
Thus, Simple Interest = $130
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 = $3250 + $130
= $3380
Thus, Amount to be paid = $3380 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 = $3250
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 2% × 2)
= $3250 + ($3250 ×2/100 × 2)
= $3250 + (3250 × 2 × 2/100)
= $3250 + (6500 × 2/100)
= $3250 + (13000/100)
= $3250 + $130 = $3380
Thus, Amount (A) to be paid = $3380 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 $3250, the simple interest in 1 year
= 2/100 × 3250
= 2 × 3250/100
= 6500/100 = $65
Thus, simple interest in 1 year = $65
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $65 × 2 = $130
Thus, Simple Interest (SI) = $130
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $130
= $3380
Thus, Amount to be paid = $3380 Answer
Similar Questions
(1) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(3) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(5) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(6) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9540 to clear it?
(7) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(10) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?