Question:
If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$4028
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 3% × 2
= $3800 ×3/100 × 2
= 3800 × 3 × 2/100
= 11400 × 2/100
= 22800/100
= $228
Thus, Simple Interest = $228
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 = $3800 + $228
= $4028
Thus, Amount to be paid = $4028 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 = $3800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 3% × 2)
= $3800 + ($3800 ×3/100 × 2)
= $3800 + (3800 × 3 × 2/100)
= $3800 + (11400 × 2/100)
= $3800 + (22800/100)
= $3800 + $228 = $4028
Thus, Amount (A) to be paid = $4028 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 $3800, the simple interest in 1 year
= 3/100 × 3800
= 3 × 3800/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $114 × 2 = $228
Thus, Simple Interest (SI) = $228
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $228
= $4028
Thus, Amount to be paid = $4028 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(3) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.
(4) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9238 to clear the loan, then find the time period of the loan.
(6) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(7) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(9) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?