Question:
What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?
Correct Answer
$3618
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 4% × 2
= $3350 ×4/100 × 2
= 3350 × 4 × 2/100
= 13400 × 2/100
= 26800/100
= $268
Thus, Simple Interest = $268
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 = $3350 + $268
= $3618
Thus, Amount to be paid = $3618 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 = $3350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 4% × 2)
= $3350 + ($3350 ×4/100 × 2)
= $3350 + (3350 × 4 × 2/100)
= $3350 + (13400 × 2/100)
= $3350 + (26800/100)
= $3350 + $268 = $3618
Thus, Amount (A) to be paid = $3618 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 $3350, the simple interest in 1 year
= 4/100 × 3350
= 4 × 3350/100
= 13400/100 = $134
Thus, simple interest for 1 year = $134
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $134 × 2 = $268
Thus, Simple Interest (SI) = $268
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $268
= $3618
Thus, Amount to be paid = $3618 Answer
Similar Questions
(1) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(4) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(5) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 4% simple interest?
(6) How much loan did Donna borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7877.5 to clear it?
(7) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 6% simple interest?
(9) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?