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) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(3) Ashley had to pay $5232.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.
(8) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 7% simple interest?
(9) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.