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) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.
(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.
(4) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(7) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.
(9) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.