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) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(2) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?
(3) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(5) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 8 years.
(7) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(8) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 4 years.
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.