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) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(5) If Barbara paid $4118 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 8% simple interest?
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(8) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(9) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.