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) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.
(2) How much loan did Donald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7800 to clear it?
(3) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.
(5) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $12240 to clear the loan, then find the time period of the loan.
(7) Charles had to pay $4251 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.
(9) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.