Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?
Correct Answer
$3996
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 4% × 2
= $3700 ×4/100 × 2
= 3700 × 4 × 2/100
= 14800 × 2/100
= 29600/100
= $296
Thus, Simple Interest = $296
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 = $3700 + $296
= $3996
Thus, Amount to be paid = $3996 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 = $3700
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 4% × 2)
= $3700 + ($3700 ×4/100 × 2)
= $3700 + (3700 × 4 × 2/100)
= $3700 + (14800 × 2/100)
= $3700 + (29600/100)
= $3700 + $296 = $3996
Thus, Amount (A) to be paid = $3996 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 $3700, the simple interest in 1 year
= 4/100 × 3700
= 4 × 3700/100
= 14800/100 = $148
Thus, simple interest for 1 year = $148
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $148 × 2 = $296
Thus, Simple Interest (SI) = $296
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $296
= $3996
Thus, Amount to be paid = $3996 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?
(2) In how much time a principal of $3200 will amount to $4000 at a simple interest of 5% per annum?
(3) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(5) What amount will be due after 2 years if William borrowed a sum of $3250 at a 10% simple interest?
(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?
(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 8 years.
(8) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(9) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8856 to clear the loan, then find the time period of the loan.
(10) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.