Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 4% simple interest?
Correct Answer
$3726
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 4% × 2
= $3450 ×4/100 × 2
= 3450 × 4 × 2/100
= 13800 × 2/100
= 27600/100
= $276
Thus, Simple Interest = $276
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 = $3450 + $276
= $3726
Thus, Amount to be paid = $3726 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 = $3450
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 4% × 2)
= $3450 + ($3450 ×4/100 × 2)
= $3450 + (3450 × 4 × 2/100)
= $3450 + (13800 × 2/100)
= $3450 + (27600/100)
= $3450 + $276 = $3726
Thus, Amount (A) to be paid = $3726 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 $3450, the simple interest in 1 year
= 4/100 × 3450
= 4 × 3450/100
= 13800/100 = $138
Thus, simple interest for 1 year = $138
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $138 × 2 = $276
Thus, Simple Interest (SI) = $276
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $276
= $3726
Thus, Amount to be paid = $3726 Answer
Similar Questions
(1) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 6% simple interest?
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(4) How much loan did Patricia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5665 to clear it?
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 3 years.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(10) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?