Question:
Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.
Correct Answer
$3339
Solution And Explanation
Solution
Given,
Principal (P) = $3150
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3150 × 2% × 3
= $3150 ×2/100 × 3
= 3150 × 2 × 3/100
= 6300 × 3/100
= 18900/100
= $189
Thus, Simple Interest = $189
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 = $3150 + $189
= $3339
Thus, Amount to be paid = $3339 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 = $3150
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3150 + ($3150 × 2% × 3)
= $3150 + ($3150 ×2/100 × 3)
= $3150 + (3150 × 2 × 3/100)
= $3150 + (6300 × 3/100)
= $3150 + (18900/100)
= $3150 + $189 = $3339
Thus, Amount (A) to be paid = $3339 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3150, the simple interest in 1 year
= 2/100 × 3150
= 2 × 3150/100
= 6300/100 = $63
Thus, simple interest for 1 year = $63
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $63 × 3 = $189
Thus, Simple Interest (SI) = $189
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $189
= $3339
Thus, Amount to be paid = $3339 Answer
Similar Questions
(1) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(4) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?
(5) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.
(6) How much loan did Michael borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6095 to clear it?
(7) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 5% simple interest?
(8) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(9) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?