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) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(3) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(4) How much loan did Anthony borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7245 to clear it?
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(7) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.
(8) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 8 years.