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) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?
(2) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(4) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 7% simple interest?
(6) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(7) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(9) Christopher had to pay $4360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.