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) What amount does David have to pay after 5 years if he takes a loan of $3400 at 2% simple interest?
(2) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(3) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(4) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(5) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(7) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 8 years.
(9) Joshua had to pay $5635 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?