Question:
Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
Correct Answer
$3710
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 2% × 3
= $3500 ×2/100 × 3
= 3500 × 2 × 3/100
= 7000 × 3/100
= 21000/100
= $210
Thus, Simple Interest = $210
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 = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 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 = $3500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 2% × 3)
= $3500 + ($3500 ×2/100 × 3)
= $3500 + (3500 × 2 × 3/100)
= $3500 + (7000 × 3/100)
= $3500 + (21000/100)
= $3500 + $210 = $3710
Thus, Amount (A) to be paid = $3710 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 $3500, the simple interest in 1 year
= 2/100 × 3500
= 2 × 3500/100
= 7000/100 = $70
Thus, simple interest for 1 year = $70
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $70 × 3 = $210
Thus, Simple Interest (SI) = $210
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 Answer
Similar Questions
(1) Paul had to pay $5405 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.
(3) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(9) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(10) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.