Question:
What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
Correct Answer
$3348
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 4% × 2
= $3100 ×4/100 × 2
= 3100 × 4 × 2/100
= 12400 × 2/100
= 24800/100
= $248
Thus, Simple Interest = $248
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 = $3100 + $248
= $3348
Thus, Amount to be paid = $3348 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 = $3100
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 4% × 2)
= $3100 + ($3100 ×4/100 × 2)
= $3100 + (3100 × 4 × 2/100)
= $3100 + (12400 × 2/100)
= $3100 + (24800/100)
= $3100 + $248 = $3348
Thus, Amount (A) to be paid = $3348 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 $3100, the simple interest in 1 year
= 4/100 × 3100
= 4 × 3100/100
= 12400/100 = $124
Thus, simple interest for 1 year = $124
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $124 × 2 = $248
Thus, Simple Interest (SI) = $248
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $248
= $3348
Thus, Amount to be paid = $3348 Answer
Similar Questions
(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(2) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(3) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(5) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(7) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(9) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(10) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.