Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
Correct Answer
$3869
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 2% × 3
= $3650 ×2/100 × 3
= 3650 × 2 × 3/100
= 7300 × 3/100
= 21900/100
= $219
Thus, Simple Interest = $219
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 = $3650 + $219
= $3869
Thus, Amount to be paid = $3869 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 = $3650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3650 + ($3650 × 2% × 3)
= $3650 + ($3650 ×2/100 × 3)
= $3650 + (3650 × 2 × 3/100)
= $3650 + (7300 × 3/100)
= $3650 + (21900/100)
= $3650 + $219 = $3869
Thus, Amount (A) to be paid = $3869 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 $3650, the simple interest in 1 year
= 2/100 × 3650
= 2 × 3650/100
= 7300/100 = $73
Thus, simple interest for 1 year = $73
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $73 × 3 = $219
Thus, Simple Interest (SI) = $219
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $219
= $3869
Thus, Amount to be paid = $3869 Answer
Similar Questions
(1) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(2) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.
(3) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(4) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
(6) How much loan did Charles borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7080 to clear it?
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(8) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(10) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.