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) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(7) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(8) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(10) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.