Question:
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.
Correct Answer
$3744
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 2% × 2
= $3600 ×2/100 × 2
= 3600 × 2 × 2/100
= 7200 × 2/100
= 14400/100
= $144
Thus, Simple Interest = $144
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 = $3600 + $144
= $3744
Thus, Amount to be paid = $3744 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 = $3600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 2% × 2)
= $3600 + ($3600 ×2/100 × 2)
= $3600 + (3600 × 2 × 2/100)
= $3600 + (7200 × 2/100)
= $3600 + (14400/100)
= $3600 + $144 = $3744
Thus, Amount (A) to be paid = $3744 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 $3600, the simple interest in 1 year
= 2/100 × 3600
= 2 × 3600/100
= 7200/100 = $72
Thus, simple interest in 1 year = $72
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $72 × 2 = $144
Thus, Simple Interest (SI) = $144
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $144
= $3744
Thus, Amount to be paid = $3744 Answer
Similar Questions
(1) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(3) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 8 years.
(4) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(5) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.
(7) How much loan did Timothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8510 to clear it?
(8) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.
(10) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.