Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?
Correct Answer
$4104
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 4% × 2
= $3800 ×4/100 × 2
= 3800 × 4 × 2/100
= 15200 × 2/100
= 30400/100
= $304
Thus, Simple Interest = $304
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 = $3800 + $304
= $4104
Thus, Amount to be paid = $4104 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 = $3800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 4% × 2)
= $3800 + ($3800 ×4/100 × 2)
= $3800 + (3800 × 4 × 2/100)
= $3800 + (15200 × 2/100)
= $3800 + (30400/100)
= $3800 + $304 = $4104
Thus, Amount (A) to be paid = $4104 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 $3800, the simple interest in 1 year
= 4/100 × 3800
= 4 × 3800/100
= 15200/100 = $152
Thus, simple interest for 1 year = $152
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $152 × 2 = $304
Thus, Simple Interest (SI) = $304
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $304
= $4104
Thus, Amount to be paid = $4104 Answer
Similar Questions
(1) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.
(2) Michael had to pay $3696 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(5) Charles had to pay $4134 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 9% simple interest?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(9) If Richard borrowed $3600 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) In how much time a principal of $3100 will amount to $3379 at a simple interest of 3% per annum?