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) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(2) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(4) In how much time a principal of $3100 will amount to $3565 at a simple interest of 3% per annum?
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 8 years.
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
(7) John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(9) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12308 to clear the loan, then find the time period of the loan.