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) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?
(2) How much loan did Betty borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7812.5 to clear it?
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(4) If Christopher paid $4800 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13800 to clear the loan, then find the time period of the loan.
(6) Michael had to pay $3696 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(9) In how much time a principal of $3200 will amount to $3584 at a simple interest of 3% per annum?
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 4 years.