Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
Correct Answer
$3551
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 2% × 3
= $3350 ×2/100 × 3
= 3350 × 2 × 3/100
= 6700 × 3/100
= 20100/100
= $201
Thus, Simple Interest = $201
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 = $3350 + $201
= $3551
Thus, Amount to be paid = $3551 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 = $3350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3350 + ($3350 × 2% × 3)
= $3350 + ($3350 ×2/100 × 3)
= $3350 + (3350 × 2 × 3/100)
= $3350 + (6700 × 3/100)
= $3350 + (20100/100)
= $3350 + $201 = $3551
Thus, Amount (A) to be paid = $3551 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 $3350, the simple interest in 1 year
= 2/100 × 3350
= 2 × 3350/100
= 6700/100 = $67
Thus, simple interest for 1 year = $67
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $67 × 3 = $201
Thus, Simple Interest (SI) = $201
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $201
= $3551
Thus, Amount to be paid = $3551 Answer
Similar Questions
(1) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 4 years.
(3) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 5% simple interest?
(4) Betty had to pay $4632.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 8 years.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.
(9) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.