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) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 10% simple interest?
(2) 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.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
(5) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(6) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(7) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(9) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?