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) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 8 years.
(4) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(7) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(10) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.