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) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.
(4) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(6) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(7) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
(9) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(10) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.