Question:
If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3816
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 3% × 2
= $3600 ×3/100 × 2
= 3600 × 3 × 2/100
= 10800 × 2/100
= 21600/100
= $216
Thus, Simple Interest = $216
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 = $3600 + $216
= $3816
Thus, Amount to be paid = $3816 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 = $3600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 3% × 2)
= $3600 + ($3600 ×3/100 × 2)
= $3600 + (3600 × 3 × 2/100)
= $3600 + (10800 × 2/100)
= $3600 + (21600/100)
= $3600 + $216 = $3816
Thus, Amount (A) to be paid = $3816 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 $3600, the simple interest in 1 year
= 3/100 × 3600
= 3 × 3600/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $108 × 2 = $216
Thus, Simple Interest (SI) = $216
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $216
= $3816
Thus, Amount to be paid = $3816 Answer
Similar Questions
(1) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(3) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 3 years.
(6) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(10) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.