Question:
If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3536
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 2% × 2
= $3400 ×2/100 × 2
= 3400 × 2 × 2/100
= 6800 × 2/100
= 13600/100
= $136
Thus, Simple Interest = $136
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 = $3400 + $136
= $3536
Thus, Amount to be paid = $3536 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 = $3400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 2% × 2)
= $3400 + ($3400 ×2/100 × 2)
= $3400 + (3400 × 2 × 2/100)
= $3400 + (6800 × 2/100)
= $3400 + (13600/100)
= $3400 + $136 = $3536
Thus, Amount (A) to be paid = $3536 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 $3400, the simple interest in 1 year
= 2/100 × 3400
= 2 × 3400/100
= 6800/100 = $68
Thus, simple interest in 1 year = $68
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $68 × 2 = $136
Thus, Simple Interest (SI) = $136
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $136
= $3536
Thus, Amount to be paid = $3536 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 7 years.
(2) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 7 years.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(6) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(7) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(9) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.
(10) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.