Question:
If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3922
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 3% × 2
= $3700 ×3/100 × 2
= 3700 × 3 × 2/100
= 11100 × 2/100
= 22200/100
= $222
Thus, Simple Interest = $222
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 = $3700 + $222
= $3922
Thus, Amount to be paid = $3922 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 = $3700
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 3% × 2)
= $3700 + ($3700 ×3/100 × 2)
= $3700 + (3700 × 3 × 2/100)
= $3700 + (11100 × 2/100)
= $3700 + (22200/100)
= $3700 + $222 = $3922
Thus, Amount (A) to be paid = $3922 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 $3700, the simple interest in 1 year
= 3/100 × 3700
= 3 × 3700/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $111 × 2 = $222
Thus, Simple Interest (SI) = $222
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $222
= $3922
Thus, Amount to be paid = $3922 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(3) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(4) Robert had to pay $3472 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Sarah had to pay $4196.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(10) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.