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) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.
(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 5% simple interest?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.
(6) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
(8) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(10) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.