Question:
If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3952
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 2% × 2
= $3800 ×2/100 × 2
= 3800 × 2 × 2/100
= 7600 × 2/100
= 15200/100
= $152
Thus, Simple Interest = $152
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 = $3800 + $152
= $3952
Thus, Amount to be paid = $3952 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 = $3800
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 2% × 2)
= $3800 + ($3800 ×2/100 × 2)
= $3800 + (3800 × 2 × 2/100)
= $3800 + (7600 × 2/100)
= $3800 + (15200/100)
= $3800 + $152 = $3952
Thus, Amount (A) to be paid = $3952 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 $3800, the simple interest in 1 year
= 2/100 × 3800
= 2 × 3800/100
= 7600/100 = $76
Thus, simple interest in 1 year = $76
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $76 × 2 = $152
Thus, Simple Interest (SI) = $152
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $152
= $3952
Thus, Amount to be paid = $3952 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(2) How much loan did Richard borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6440 to clear it?
(3) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.
(4) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?
(5) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(6) Michael had to pay $3498 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 7 years.
(9) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(10) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.