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) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(2) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
(3) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(6) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(7) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) 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.
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(10) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.