Question:
If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3551
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 3% × 2
= $3350 ×3/100 × 2
= 3350 × 3 × 2/100
= 10050 × 2/100
= 20100/100
= $201
Thus, Simple Interest = $201
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 = $3350 + $201
= $3551
Thus, Amount to be paid = $3551 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 = $3350
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 3% × 2)
= $3350 + ($3350 ×3/100 × 2)
= $3350 + (3350 × 3 × 2/100)
= $3350 + (10050 × 2/100)
= $3350 + (20100/100)
= $3350 + $201 = $3551
Thus, Amount (A) to be paid = $3551 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 $3350, the simple interest in 1 year
= 3/100 × 3350
= 3 × 3350/100
= 10050/100 = $100.5
Thus, simple interest for 1 year = $100.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $100.5 × 2 = $201
Thus, Simple Interest (SI) = $201
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $201
= $3551
Thus, Amount to be paid = $3551 Answer
Similar Questions
(1) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 5% simple interest?
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(5) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(6) If Michelle paid $5940 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 3% simple interest?
(8) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(9) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?