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) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 5% simple interest?
(2) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(4) If William paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 4% simple interest?
(6) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 4% simple interest?
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(8) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?