Question:
If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3796
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 2% × 2
= $3650 ×2/100 × 2
= 3650 × 2 × 2/100
= 7300 × 2/100
= 14600/100
= $146
Thus, Simple Interest = $146
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 = $3650 + $146
= $3796
Thus, Amount to be paid = $3796 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 = $3650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 2% × 2)
= $3650 + ($3650 ×2/100 × 2)
= $3650 + (3650 × 2 × 2/100)
= $3650 + (7300 × 2/100)
= $3650 + (14600/100)
= $3650 + $146 = $3796
Thus, Amount (A) to be paid = $3796 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 $3650, the simple interest in 1 year
= 2/100 × 3650
= 2 × 3650/100
= 7300/100 = $73
Thus, simple interest in 1 year = $73
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $73 × 2 = $146
Thus, Simple Interest (SI) = $146
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $146
= $3796
Thus, Amount to be paid = $3796 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 3 years.
(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(4) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 8 years.
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.
(7) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(9) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.