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) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(3) John had to pay $3488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?
(7) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(9) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 7% simple interest.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 7 years.