Question:
If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3710
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 3% × 2
= $3500 ×3/100 × 2
= 3500 × 3 × 2/100
= 10500 × 2/100
= 21000/100
= $210
Thus, Simple Interest = $210
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 = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 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 = $3500
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 3% × 2)
= $3500 + ($3500 ×3/100 × 2)
= $3500 + (3500 × 3 × 2/100)
= $3500 + (10500 × 2/100)
= $3500 + (21000/100)
= $3500 + $210 = $3710
Thus, Amount (A) to be paid = $3710 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 $3500, the simple interest in 1 year
= 3/100 × 3500
= 3 × 3500/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $105 × 2 = $210
Thus, Simple Interest (SI) = $210
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 4 years.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(5) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 7 years.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.