Question:
If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3657
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 3% × 2
= $3450 ×3/100 × 2
= 3450 × 3 × 2/100
= 10350 × 2/100
= 20700/100
= $207
Thus, Simple Interest = $207
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 = $3450 + $207
= $3657
Thus, Amount to be paid = $3657 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 = $3450
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 3% × 2)
= $3450 + ($3450 ×3/100 × 2)
= $3450 + (3450 × 3 × 2/100)
= $3450 + (10350 × 2/100)
= $3450 + (20700/100)
= $3450 + $207 = $3657
Thus, Amount (A) to be paid = $3657 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 $3450, the simple interest in 1 year
= 3/100 × 3450
= 3 × 3450/100
= 10350/100 = $103.5
Thus, simple interest for 1 year = $103.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $103.5 × 2 = $207
Thus, Simple Interest (SI) = $207
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $207
= $3657
Thus, Amount to be paid = $3657 Answer
Similar Questions
(1) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(4) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 8 years.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
(6) How much loan did Sandra borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8062.5 to clear it?
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(9) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 3 years.