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) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(4) How much loan did Daniel borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7320 to clear it?
(5) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(6) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?
(8) If Paul paid $5640 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?