Question:
If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3445
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 3% × 2
= $3250 ×3/100 × 2
= 3250 × 3 × 2/100
= 9750 × 2/100
= 19500/100
= $195
Thus, Simple Interest = $195
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 = $3250 + $195
= $3445
Thus, Amount to be paid = $3445 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 = $3250
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 3% × 2)
= $3250 + ($3250 ×3/100 × 2)
= $3250 + (3250 × 3 × 2/100)
= $3250 + (9750 × 2/100)
= $3250 + (19500/100)
= $3250 + $195 = $3445
Thus, Amount (A) to be paid = $3445 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 $3250, the simple interest in 1 year
= 3/100 × 3250
= 3 × 3250/100
= 9750/100 = $97.5
Thus, simple interest for 1 year = $97.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $97.5 × 2 = $195
Thus, Simple Interest (SI) = $195
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $195
= $3445
Thus, Amount to be paid = $3445 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 7 years.
(2) What amount will be due after 2 years if David borrowed a sum of $3200 at a 10% simple interest?
(3) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(7) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 10% simple interest?
(9) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7003 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.