Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 4% simple interest?
Correct Answer
$3780
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 4% × 2
= $3500 ×4/100 × 2
= 3500 × 4 × 2/100
= 14000 × 2/100
= 28000/100
= $280
Thus, Simple Interest = $280
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 = $3500 + $280
= $3780
Thus, Amount to be paid = $3780 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 = $3500
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 4% × 2)
= $3500 + ($3500 ×4/100 × 2)
= $3500 + (3500 × 4 × 2/100)
= $3500 + (14000 × 2/100)
= $3500 + (28000/100)
= $3500 + $280 = $3780
Thus, Amount (A) to be paid = $3780 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 $3500, the simple interest in 1 year
= 4/100 × 3500
= 4 × 3500/100
= 14000/100 = $140
Thus, simple interest for 1 year = $140
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $140 × 2 = $280
Thus, Simple Interest (SI) = $280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $280
= $3780
Thus, Amount to be paid = $3780 Answer
Similar Questions
(1) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(3) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?
(4) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(5) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(7) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.
(10) If Lisa paid $4374 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.