Question:
What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
Correct Answer
$3564
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 4% × 2
= $3300 ×4/100 × 2
= 3300 × 4 × 2/100
= 13200 × 2/100
= 26400/100
= $264
Thus, Simple Interest = $264
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 = $3300 + $264
= $3564
Thus, Amount to be paid = $3564 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 = $3300
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 4% × 2)
= $3300 + ($3300 ×4/100 × 2)
= $3300 + (3300 × 4 × 2/100)
= $3300 + (13200 × 2/100)
= $3300 + (26400/100)
= $3300 + $264 = $3564
Thus, Amount (A) to be paid = $3564 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 $3300, the simple interest in 1 year
= 4/100 × 3300
= 4 × 3300/100
= 13200/100 = $132
Thus, simple interest for 1 year = $132
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $132 × 2 = $264
Thus, Simple Interest (SI) = $264
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $264
= $3564
Thus, Amount to be paid = $3564 Answer
Similar Questions
(1) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(2) In how much time a principal of $3050 will amount to $3660 at a simple interest of 5% per annum?
(3) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(5) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $13000 to clear the loan, then find the time period of the loan.
(6) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(8) How much loan did Ryan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9085 to clear it?
(9) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(10) How much loan did Steven borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8250 to clear it?