Question:
Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 3 years.
Correct Answer
$3604
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3400 × 2% × 3
= $3400 ×2/100 × 3
= 3400 × 2 × 3/100
= 6800 × 3/100
= 20400/100
= $204
Thus, Simple Interest = $204
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 = $3400 + $204
= $3604
Thus, Amount to be paid = $3604 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 = $3400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3400 + ($3400 × 2% × 3)
= $3400 + ($3400 ×2/100 × 3)
= $3400 + (3400 × 2 × 3/100)
= $3400 + (6800 × 3/100)
= $3400 + (20400/100)
= $3400 + $204 = $3604
Thus, Amount (A) to be paid = $3604 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3400, the simple interest in 1 year
= 2/100 × 3400
= 2 × 3400/100
= 6800/100 = $68
Thus, simple interest for 1 year = $68
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $68 × 3 = $204
Thus, Simple Interest (SI) = $204
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $204
= $3604
Thus, Amount to be paid = $3604 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.
(2) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(3) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 8 years.
(5) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(6) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) If Christopher paid $4640 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 7 years.