Question:
If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3640
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 2% × 2
= $3500 ×2/100 × 2
= 3500 × 2 × 2/100
= 7000 × 2/100
= 14000/100
= $140
Thus, Simple Interest = $140
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 = $3500 + $140
= $3640
Thus, Amount to be paid = $3640 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 = $3500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 2% × 2)
= $3500 + ($3500 ×2/100 × 2)
= $3500 + (3500 × 2 × 2/100)
= $3500 + (7000 × 2/100)
= $3500 + (14000/100)
= $3500 + $140 = $3640
Thus, Amount (A) to be paid = $3640 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 $3500, the simple interest in 1 year
= 2/100 × 3500
= 2 × 3500/100
= 7000/100 = $70
Thus, simple interest in 1 year = $70
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $70 × 2 = $140
Thus, Simple Interest (SI) = $140
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $140
= $3640
Thus, Amount to be paid = $3640 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(3) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(4) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(5) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(6) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 8 years.
(8) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(9) If Sandra paid $4806 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.