Question:
If Linda borrowed $3350 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3484
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 2% × 2
= $3350 ×2/100 × 2
= 3350 × 2 × 2/100
= 6700 × 2/100
= 13400/100
= $134
Thus, Simple Interest = $134
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 = $3350 + $134
= $3484
Thus, Amount to be paid = $3484 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 = $3350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 2% × 2)
= $3350 + ($3350 ×2/100 × 2)
= $3350 + (3350 × 2 × 2/100)
= $3350 + (6700 × 2/100)
= $3350 + (13400/100)
= $3350 + $134 = $3484
Thus, Amount (A) to be paid = $3484 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 $3350, the simple interest in 1 year
= 2/100 × 3350
= 2 × 3350/100
= 6700/100 = $67
Thus, simple interest in 1 year = $67
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $67 × 2 = $134
Thus, Simple Interest (SI) = $134
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $134
= $3484
Thus, Amount to be paid = $3484 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(2) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
(3) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(4) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(6) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
(8) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.
(9) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 7 years.