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) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(3) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.
(4) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(7) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(8) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(10) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 7% simple interest?