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) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 3 years.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(4) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 4 years.
(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(8) If Elizabeth paid $4002 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 4 years.
(10) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.