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) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(2) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(4) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(6) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(8) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(10) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.