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) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(3) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?
(4) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?
(5) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(6) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(8) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(9) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(10) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.