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) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(3) How much loan did Thomas borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6960 to clear it?
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(7) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.
(10) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 4 years.