Question:
If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3392
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 3% × 2
= $3200 ×3/100 × 2
= 3200 × 3 × 2/100
= 9600 × 2/100
= 19200/100
= $192
Thus, Simple Interest = $192
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 = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 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 = $3200
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 3% × 2)
= $3200 + ($3200 ×3/100 × 2)
= $3200 + (3200 × 3 × 2/100)
= $3200 + (9600 × 2/100)
= $3200 + (19200/100)
= $3200 + $192 = $3392
Thus, Amount (A) to be paid = $3392 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 $3200, the simple interest in 1 year
= 3/100 × 3200
= 3 × 3200/100
= 9600/100 = $96
Thus, simple interest for 1 year = $96
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $96 × 2 = $192
Thus, Simple Interest (SI) = $192
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(3) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
(6) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Lisa had to pay $4536 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(9) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.
(10) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.