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) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.
(2) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(3) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(4) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7240 to clear the loan, then find the time period of the loan.
(5) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.
(6) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(8) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10600 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.