Question:
What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?
Correct Answer
$3456
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 4% × 2
= $3200 ×4/100 × 2
= 3200 × 4 × 2/100
= 12800 × 2/100
= 25600/100
= $256
Thus, Simple Interest = $256
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 = $3200 + $256
= $3456
Thus, Amount to be paid = $3456 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 = $3200
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 4% × 2)
= $3200 + ($3200 ×4/100 × 2)
= $3200 + (3200 × 4 × 2/100)
= $3200 + (12800 × 2/100)
= $3200 + (25600/100)
= $3200 + $256 = $3456
Thus, Amount (A) to be paid = $3456 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 $3200, the simple interest in 1 year
= 4/100 × 3200
= 4 × 3200/100
= 12800/100 = $128
Thus, simple interest for 1 year = $128
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $128 × 2 = $256
Thus, Simple Interest (SI) = $256
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $256
= $3456
Thus, Amount to be paid = $3456 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 7 years.
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(3) If Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
(6) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(7) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(9) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(10) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.