Question:
If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3763
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 3% × 2
= $3550 ×3/100 × 2
= 3550 × 3 × 2/100
= 10650 × 2/100
= 21300/100
= $213
Thus, Simple Interest = $213
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 = $3550 + $213
= $3763
Thus, Amount to be paid = $3763 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 = $3550
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 3% × 2)
= $3550 + ($3550 ×3/100 × 2)
= $3550 + (3550 × 3 × 2/100)
= $3550 + (10650 × 2/100)
= $3550 + (21300/100)
= $3550 + $213 = $3763
Thus, Amount (A) to be paid = $3763 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 $3550, the simple interest in 1 year
= 3/100 × 3550
= 3 × 3550/100
= 10650/100 = $106.5
Thus, simple interest for 1 year = $106.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $106.5 × 2 = $213
Thus, Simple Interest (SI) = $213
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $213
= $3763
Thus, Amount to be paid = $3763 Answer
Similar Questions
(1) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
(3) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11403 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(5) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(7) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(10) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.