Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
Correct Answer
$3510
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 4% × 2
= $3250 ×4/100 × 2
= 3250 × 4 × 2/100
= 13000 × 2/100
= 26000/100
= $260
Thus, Simple Interest = $260
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 = $3250 + $260
= $3510
Thus, Amount to be paid = $3510 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 = $3250
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 4% × 2)
= $3250 + ($3250 ×4/100 × 2)
= $3250 + (3250 × 4 × 2/100)
= $3250 + (13000 × 2/100)
= $3250 + (26000/100)
= $3250 + $260 = $3510
Thus, Amount (A) to be paid = $3510 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 $3250, the simple interest in 1 year
= 4/100 × 3250
= 4 × 3250/100
= 13000/100 = $130
Thus, simple interest for 1 year = $130
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $130 × 2 = $260
Thus, Simple Interest (SI) = $260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $260
= $3510
Thus, Amount to be paid = $3510 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(2) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(4) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
(5) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?
(6) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(7) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 10% simple interest?
(9) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.