Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 4% simple interest?
Correct Answer
$3942
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 4% × 2
= $3650 ×4/100 × 2
= 3650 × 4 × 2/100
= 14600 × 2/100
= 29200/100
= $292
Thus, Simple Interest = $292
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 = $3650 + $292
= $3942
Thus, Amount to be paid = $3942 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 = $3650
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 4% × 2)
= $3650 + ($3650 ×4/100 × 2)
= $3650 + (3650 × 4 × 2/100)
= $3650 + (14600 × 2/100)
= $3650 + (29200/100)
= $3650 + $292 = $3942
Thus, Amount (A) to be paid = $3942 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 $3650, the simple interest in 1 year
= 4/100 × 3650
= 4 × 3650/100
= 14600/100 = $146
Thus, simple interest for 1 year = $146
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $146 × 2 = $292
Thus, Simple Interest (SI) = $292
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $292
= $3942
Thus, Amount to be paid = $3942 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(2) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $6936 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 5% simple interest?
(4) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) 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.
(6) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(9) How much loan did Ronald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8250 to clear it?
(10) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 10% simple interest.