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) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7240 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
(4) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(6) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?
(7) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(8) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 7% simple interest?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.