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) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(2) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
(5) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7450 to clear the loan, then find the time period of the loan.
(6) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
(8) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(10) Ashley had to pay $5232.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.