Question:
If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3498
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 3% × 2
= $3300 ×3/100 × 2
= 3300 × 3 × 2/100
= 9900 × 2/100
= 19800/100
= $198
Thus, Simple Interest = $198
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 = $3300 + $198
= $3498
Thus, Amount to be paid = $3498 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 = $3300
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 3% × 2)
= $3300 + ($3300 ×3/100 × 2)
= $3300 + (3300 × 3 × 2/100)
= $3300 + (9900 × 2/100)
= $3300 + (19800/100)
= $3300 + $198 = $3498
Thus, Amount (A) to be paid = $3498 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 $3300, the simple interest in 1 year
= 3/100 × 3300
= 3 × 3300/100
= 9900/100 = $99
Thus, simple interest for 1 year = $99
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $99 × 2 = $198
Thus, Simple Interest (SI) = $198
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $198
= $3498
Thus, Amount to be paid = $3498 Answer
Similar Questions
(1) In how much time a principal of $3200 will amount to $3584 at a simple interest of 3% per annum?
(2) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?
(3) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(4) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(5) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(7) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.
(8) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) If Emily paid $5320 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.