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) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(2) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(3) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 7 years.
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.
(8) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(10) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 10% simple interest?