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) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 3 years.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.
(3) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(4) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?
(8) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 7 years.