Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?
Correct Answer
$3834
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 4% × 2
= $3550 ×4/100 × 2
= 3550 × 4 × 2/100
= 14200 × 2/100
= 28400/100
= $284
Thus, Simple Interest = $284
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 = $3550 + $284
= $3834
Thus, Amount to be paid = $3834 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 = $3550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 4% × 2)
= $3550 + ($3550 ×4/100 × 2)
= $3550 + (3550 × 4 × 2/100)
= $3550 + (14200 × 2/100)
= $3550 + (28400/100)
= $3550 + $284 = $3834
Thus, Amount (A) to be paid = $3834 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 $3550, the simple interest in 1 year
= 4/100 × 3550
= 4 × 3550/100
= 14200/100 = $142
Thus, simple interest for 1 year = $142
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $142 × 2 = $284
Thus, Simple Interest (SI) = $284
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $284
= $3834
Thus, Amount to be paid = $3834 Answer
Similar Questions
(1) 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.
(2) William had to pay $4025 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(5) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(6) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.
(8) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(10) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.