Question:
If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3692
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 2% × 2
= $3550 ×2/100 × 2
= 3550 × 2 × 2/100
= 7100 × 2/100
= 14200/100
= $142
Thus, Simple Interest = $142
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 = $3550 + $142
= $3692
Thus, Amount to be paid = $3692 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 = $3550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 2% × 2)
= $3550 + ($3550 ×2/100 × 2)
= $3550 + (3550 × 2 × 2/100)
= $3550 + (7100 × 2/100)
= $3550 + (14200/100)
= $3550 + $142 = $3692
Thus, Amount (A) to be paid = $3692 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 $3550, the simple interest in 1 year
= 2/100 × 3550
= 2 × 3550/100
= 7100/100 = $71
Thus, simple interest in 1 year = $71
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $71 × 2 = $142
Thus, Simple Interest (SI) = $142
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $142
= $3692
Thus, Amount to be paid = $3692 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(3) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(4) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(6) If Susan borrowed $3650 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) If Joseph paid $4440 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(9) 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.
(10) If Richard borrowed $3600 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.