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) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(2) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.
(4) Mark had to pay $5060 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(9) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?