Question:
If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3233
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 3%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3050 × 3% × 2
= $3050 ×3/100 × 2
= 3050 × 3 × 2/100
= 9150 × 2/100
= 18300/100
= $183
Thus, Simple Interest = $183
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 = $3050 + $183
= $3233
Thus, Amount to be paid = $3233 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 = $3050
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 3% × 2)
= $3050 + ($3050 ×3/100 × 2)
= $3050 + (3050 × 3 × 2/100)
= $3050 + (9150 × 2/100)
= $3050 + (18300/100)
= $3050 + $183 = $3233
Thus, Amount (A) to be paid = $3233 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3050, the simple interest in 1 year
= 3/100 × 3050
= 3 × 3050/100
= 9150/100 = $91.5
Thus, simple interest for 1 year = $91.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $91.5 × 2 = $183
Thus, Simple Interest (SI) = $183
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $183
= $3233
Thus, Amount to be paid = $3233 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(2) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9050 to clear the loan, then find the time period of the loan.
(3) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(5) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 8 years.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 4 years.
(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?
(9) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.