Question:
If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 2% × 2
= $3750 ×2/100 × 2
= 3750 × 2 × 2/100
= 7500 × 2/100
= 15000/100
= $150
Thus, Simple Interest = $150
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 = $3750 + $150
= $3900
Thus, Amount to be paid = $3900 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 = $3750
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 2% × 2)
= $3750 + ($3750 ×2/100 × 2)
= $3750 + (3750 × 2 × 2/100)
= $3750 + (7500 × 2/100)
= $3750 + (15000/100)
= $3750 + $150 = $3900
Thus, Amount (A) to be paid = $3900 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 $3750, the simple interest in 1 year
= 2/100 × 3750
= 2 × 3750/100
= 7500/100 = $75
Thus, simple interest in 1 year = $75
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $75 × 2 = $150
Thus, Simple Interest (SI) = $150
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $150
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 8 years.
(3) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
(4) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $7992 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 8 years.
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(10) If Matthew paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.