Question:
If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3848
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 2% × 2
= $3700 ×2/100 × 2
= 3700 × 2 × 2/100
= 7400 × 2/100
= 14800/100
= $148
Thus, Simple Interest = $148
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 = $3700 + $148
= $3848
Thus, Amount to be paid = $3848 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 = $3700
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 2% × 2)
= $3700 + ($3700 ×2/100 × 2)
= $3700 + (3700 × 2 × 2/100)
= $3700 + (7400 × 2/100)
= $3700 + (14800/100)
= $3700 + $148 = $3848
Thus, Amount (A) to be paid = $3848 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 $3700, the simple interest in 1 year
= 2/100 × 3700
= 2 × 3700/100
= 7400/100 = $74
Thus, simple interest in 1 year = $74
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $74 × 2 = $148
Thus, Simple Interest (SI) = $148
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $148
= $3848
Thus, Amount to be paid = $3848 Answer
Similar Questions
(1) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 6% simple interest?
(2) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(3) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 5% simple interest?
(5) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.
(8) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.
(9) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(10) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.