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 Patricia borrowed a sum of $3150 at 2% simple interest for 4 years.
(2) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(4) If Michael paid $3564 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(6) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 3 years.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(8) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
(9) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.