Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
Correct Answer
$3816
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 2% × 3
= $3600 ×2/100 × 3
= 3600 × 2 × 3/100
= 7200 × 3/100
= 21600/100
= $216
Thus, Simple Interest = $216
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 = $3600 + $216
= $3816
Thus, Amount to be paid = $3816 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 = $3600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 2% × 3)
= $3600 + ($3600 ×2/100 × 3)
= $3600 + (3600 × 2 × 3/100)
= $3600 + (7200 × 3/100)
= $3600 + (21600/100)
= $3600 + $216 = $3816
Thus, Amount (A) to be paid = $3816 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 $3600, the simple interest in 1 year
= 2/100 × 3600
= 2 × 3600/100
= 7200/100 = $72
Thus, simple interest for 1 year = $72
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $72 × 3 = $216
Thus, Simple Interest (SI) = $216
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $216
= $3816
Thus, Amount to be paid = $3816 Answer
Similar Questions
(1) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(2) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(4) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?
(5) Donald had to pay $4770 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) If Matthew paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 8 years.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 3 years.
(10) How much loan did Matthew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7130 to clear it?