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) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(2) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?
(3) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(4) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
(6) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?
(7) How much loan did Jessica borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6900 to clear it?
(8) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(10) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.