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) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(3) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(4) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?
(7) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(9) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(10) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.