Question:
Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
Correct Answer
$3392
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 2% × 3
= $3200 ×2/100 × 3
= 3200 × 2 × 3/100
= 6400 × 3/100
= 19200/100
= $192
Thus, Simple Interest = $192
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 = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 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 = $3200
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 2% × 3)
= $3200 + ($3200 ×2/100 × 3)
= $3200 + (3200 × 2 × 3/100)
= $3200 + (6400 × 3/100)
= $3200 + (19200/100)
= $3200 + $192 = $3392
Thus, Amount (A) to be paid = $3392 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 $3200, the simple interest in 1 year
= 2/100 × 3200
= 2 × 3200/100
= 6400/100 = $64
Thus, simple interest for 1 year = $64
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $64 × 3 = $192
Thus, Simple Interest (SI) = $192
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 Answer
Similar Questions
(1) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 5% simple interest?
(3) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.
(4) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?
(5) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(7) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.
(10) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.