Question:
What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 4% simple interest?
Correct Answer
$3888
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 4% × 2
= $3600 ×4/100 × 2
= 3600 × 4 × 2/100
= 14400 × 2/100
= 28800/100
= $288
Thus, Simple Interest = $288
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 = $3600 + $288
= $3888
Thus, Amount to be paid = $3888 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 = $3600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 4% × 2)
= $3600 + ($3600 ×4/100 × 2)
= $3600 + (3600 × 4 × 2/100)
= $3600 + (14400 × 2/100)
= $3600 + (28800/100)
= $3600 + $288 = $3888
Thus, Amount (A) to be paid = $3888 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 $3600, the simple interest in 1 year
= 4/100 × 3600
= 4 × 3600/100
= 14400/100 = $144
Thus, simple interest for 1 year = $144
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $144 × 2 = $288
Thus, Simple Interest (SI) = $288
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $288
= $3888
Thus, Amount to be paid = $3888 Answer
Similar Questions
(1) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.
(3) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.
(4) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.
(5) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?
(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?
(8) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(9) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?