Question:
If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$4056
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 2% × 2
= $3900 ×2/100 × 2
= 3900 × 2 × 2/100
= 7800 × 2/100
= 15600/100
= $156
Thus, Simple Interest = $156
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 = $3900 + $156
= $4056
Thus, Amount to be paid = $4056 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 = $3900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 2% × 2)
= $3900 + ($3900 ×2/100 × 2)
= $3900 + (3900 × 2 × 2/100)
= $3900 + (7800 × 2/100)
= $3900 + (15600/100)
= $3900 + $156 = $4056
Thus, Amount (A) to be paid = $4056 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 $3900, the simple interest in 1 year
= 2/100 × 3900
= 2 × 3900/100
= 7800/100 = $78
Thus, simple interest in 1 year = $78
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $78 × 2 = $156
Thus, Simple Interest (SI) = $156
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $156
= $4056
Thus, Amount to be paid = $4056 Answer
Similar Questions
(1) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 8 years.
(2) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(5) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.
(7) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 3% simple interest?
(8) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(9) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?
(10) 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.