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) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 10% simple interest?
(4) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.
(6) If Linda borrowed $3350 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 7% simple interest?
(8) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(9) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.