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) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(3) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.
(5) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 4% simple interest?
(6) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(8) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(9) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 6% simple interest?