Question:
If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$4187
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 3% × 2
= $3950 ×3/100 × 2
= 3950 × 3 × 2/100
= 11850 × 2/100
= 23700/100
= $237
Thus, Simple Interest = $237
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 = $3950 + $237
= $4187
Thus, Amount to be paid = $4187 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 = $3950
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 3% × 2)
= $3950 + ($3950 ×3/100 × 2)
= $3950 + (3950 × 3 × 2/100)
= $3950 + (11850 × 2/100)
= $3950 + (23700/100)
= $3950 + $237 = $4187
Thus, Amount (A) to be paid = $4187 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 $3950, the simple interest in 1 year
= 3/100 × 3950
= 3 × 3950/100
= 11850/100 = $118.5
Thus, simple interest for 1 year = $118.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $118.5 × 2 = $237
Thus, Simple Interest (SI) = $237
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $237
= $4187
Thus, Amount to be paid = $4187 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(2) If Elizabeth paid $4002 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 5% simple interest for 7 years.
(4) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 9% simple interest?
(5) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(6) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 6% simple interest?
(8) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?
(10) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?