Question:
What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?
Correct Answer
$4050
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 4% × 2
= $3750 ×4/100 × 2
= 3750 × 4 × 2/100
= 15000 × 2/100
= 30000/100
= $300
Thus, Simple Interest = $300
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 = $3750 + $300
= $4050
Thus, Amount to be paid = $4050 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 = $3750
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 4% × 2)
= $3750 + ($3750 ×4/100 × 2)
= $3750 + (3750 × 4 × 2/100)
= $3750 + (15000 × 2/100)
= $3750 + (30000/100)
= $3750 + $300 = $4050
Thus, Amount (A) to be paid = $4050 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 $3750, the simple interest in 1 year
= 4/100 × 3750
= 4 × 3750/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $150 × 2 = $300
Thus, Simple Interest (SI) = $300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $300
= $4050
Thus, Amount to be paid = $4050 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3416 at a simple interest of 4% per annum?
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(3) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(5) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(6) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.
(7) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(8) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?
(9) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(10) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.