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) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(2) If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 7 years.
(4) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 8 years.
(6) Kimberly had to pay $5208 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?
(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 3% simple interest?
(9) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.