Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 3 years.
Correct Answer
$4028
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 2% × 3
= $3800 ×2/100 × 3
= 3800 × 2 × 3/100
= 7600 × 3/100
= 22800/100
= $228
Thus, Simple Interest = $228
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 + $228
= $4028
Thus, Amount to be paid = $4028 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) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3800 + ($3800 × 2% × 3)
= $3800 + ($3800 ×2/100 × 3)
= $3800 + (3800 × 2 × 3/100)
= $3800 + (7600 × 3/100)
= $3800 + (22800/100)
= $3800 + $228 = $4028
Thus, Amount (A) to be paid = $4028 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 $3800, the simple interest in 1 year
= 2/100 × 3800
= 2 × 3800/100
= 7600/100 = $76
Thus, simple interest for 1 year = $76
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $76 × 3 = $228
Thus, Simple Interest (SI) = $228
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $228
= $4028
Thus, Amount to be paid = $4028 Answer
Similar Questions
(1) If Ashley paid $5096 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 8% simple interest?
(3) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 7% simple interest?
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(6) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(7) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(9) How much loan did Karen borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6545 to clear it?
(10) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.