Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 3 years.
Correct Answer
$3445
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 2% × 3
= $3250 ×2/100 × 3
= 3250 × 2 × 3/100
= 6500 × 3/100
= 19500/100
= $195
Thus, Simple Interest = $195
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 = $3250 + $195
= $3445
Thus, Amount to be paid = $3445 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 = $3250
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 2% × 3)
= $3250 + ($3250 ×2/100 × 3)
= $3250 + (3250 × 2 × 3/100)
= $3250 + (6500 × 3/100)
= $3250 + (19500/100)
= $3250 + $195 = $3445
Thus, Amount (A) to be paid = $3445 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 $3250, the simple interest in 1 year
= 2/100 × 3250
= 2 × 3250/100
= 6500/100 = $65
Thus, simple interest for 1 year = $65
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $65 × 3 = $195
Thus, Simple Interest (SI) = $195
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $195
= $3445
Thus, Amount to be paid = $3445 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 8 years.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(4) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(5) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?
(6) How much loan did Timothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9250 to clear it?
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(9) How much loan did Donald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7475 to clear it?
(10) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.