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) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(7) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(8) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.