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) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 7 years.
(2) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(4) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(6) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?
(8) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) If Donna paid $5432 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Thomas had to pay $4028 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.