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) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(2) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(3) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(4) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(8) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(9) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.