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) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 10% simple interest.
(2) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
(4) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(5) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(6) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.
(8) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(9) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?