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) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(2) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 7 years.
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(6) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(8) Christopher had to pay $4360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 3 years.