Question:
What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
Correct Answer
$3240
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 4%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3000 × 4% × 2
= $3000 ×4/100 × 2
= 3000 × 4 × 2/100
= 12000 × 2/100
= 24000/100
= $240
Thus, Simple Interest = $240
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 = $3000 + $240
= $3240
Thus, Amount to be paid = $3240 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 = $3000
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 4% × 2)
= $3000 + ($3000 ×4/100 × 2)
= $3000 + (3000 × 4 × 2/100)
= $3000 + (12000 × 2/100)
= $3000 + (24000/100)
= $3000 + $240 = $3240
Thus, Amount (A) to be paid = $3240 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3000, the simple interest in 1 year
= 4/100 × 3000
= 4 × 3000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $120 × 2 = $240
Thus, Simple Interest (SI) = $240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $240
= $3240
Thus, Amount to be paid = $3240 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 8 years.
(3) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.
(6) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(8) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 7 years.