Question:
What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 4% simple interest?
Correct Answer
$4212
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 4% × 2
= $3900 ×4/100 × 2
= 3900 × 4 × 2/100
= 15600 × 2/100
= 31200/100
= $312
Thus, Simple Interest = $312
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 = $3900 + $312
= $4212
Thus, Amount to be paid = $4212 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 = $3900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 4% × 2)
= $3900 + ($3900 ×4/100 × 2)
= $3900 + (3900 × 4 × 2/100)
= $3900 + (15600 × 2/100)
= $3900 + (31200/100)
= $3900 + $312 = $4212
Thus, Amount (A) to be paid = $4212 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 $3900, the simple interest in 1 year
= 4/100 × 3900
= 4 × 3900/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $156 × 2 = $312
Thus, Simple Interest (SI) = $312
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $312
= $4212
Thus, Amount to be paid = $4212 Answer
Similar Questions
(1) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(2) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(3) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(6) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9955 to clear the loan, then find the time period of the loan.
(8) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 3 years.
(10) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.