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) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 10% simple interest.
(3) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(4) How much loan did Ashley borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7205 to clear it?
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(10) 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.