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) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(2) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(4) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?
(5) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) If Kimberly paid $5580 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(8) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.