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 Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(2) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(3) How much loan did Amanda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8937.5 to clear it?
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(5) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?
(9) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(10) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.