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) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(2) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(3) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.
(4) If David paid $3944 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(6) 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.
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(8) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(10) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 9% simple interest?