Question:
If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3432
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 2% × 2
= $3300 ×2/100 × 2
= 3300 × 2 × 2/100
= 6600 × 2/100
= 13200/100
= $132
Thus, Simple Interest = $132
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 = $3300 + $132
= $3432
Thus, Amount to be paid = $3432 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 = $3300
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 2% × 2)
= $3300 + ($3300 ×2/100 × 2)
= $3300 + (3300 × 2 × 2/100)
= $3300 + (6600 × 2/100)
= $3300 + (13200/100)
= $3300 + $132 = $3432
Thus, Amount (A) to be paid = $3432 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 $3300, the simple interest in 1 year
= 2/100 × 3300
= 2 × 3300/100
= 6600/100 = $66
Thus, simple interest in 1 year = $66
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $66 × 2 = $132
Thus, Simple Interest (SI) = $132
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $132
= $3432
Thus, Amount to be paid = $3432 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.
(2) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?
(3) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 3% simple interest?
(5) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 7% simple interest?
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 7 years.
(7) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(9) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.