Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 4% simple interest?
Correct Answer
$3672
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 4% × 2
= $3400 ×4/100 × 2
= 3400 × 4 × 2/100
= 13600 × 2/100
= 27200/100
= $272
Thus, Simple Interest = $272
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 = $3400 + $272
= $3672
Thus, Amount to be paid = $3672 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 = $3400
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 4% × 2)
= $3400 + ($3400 ×4/100 × 2)
= $3400 + (3400 × 4 × 2/100)
= $3400 + (13600 × 2/100)
= $3400 + (27200/100)
= $3400 + $272 = $3672
Thus, Amount (A) to be paid = $3672 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 $3400, the simple interest in 1 year
= 4/100 × 3400
= 4 × 3400/100
= 13600/100 = $136
Thus, simple interest for 1 year = $136
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $136 × 2 = $272
Thus, Simple Interest (SI) = $272
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $272
= $3672
Thus, Amount to be paid = $3672 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.
(2) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?
(3) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
(6) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(7) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?
(10) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.