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) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(2) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(4) If Paul paid $5640 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(6) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(9) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(10) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.