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) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.
(2) If Lisa paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(6) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(8) James had to pay $3270 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(10) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.