Question:
What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?
Correct Answer
$3294
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 4% × 2
= $3050 ×4/100 × 2
= 3050 × 4 × 2/100
= 12200 × 2/100
= 24400/100
= $244
Thus, Simple Interest = $244
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 = $3050 + $244
= $3294
Thus, Amount to be paid = $3294 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 = $3050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 4% × 2)
= $3050 + ($3050 ×4/100 × 2)
= $3050 + (3050 × 4 × 2/100)
= $3050 + (12200 × 2/100)
= $3050 + (24400/100)
= $3050 + $244 = $3294
Thus, Amount (A) to be paid = $3294 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 $3050, the simple interest in 1 year
= 4/100 × 3050
= 4 × 3050/100
= 12200/100 = $122
Thus, simple interest for 1 year = $122
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $122 × 2 = $244
Thus, Simple Interest (SI) = $244
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $244
= $3294
Thus, Amount to be paid = $3294 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 4 years.
(3) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9020 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(5) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(7) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(9) Mary had to pay $3324.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.