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) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 4% simple interest?
(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(5) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
(7) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(9) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(10) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.