Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 3 years.
Correct Answer
$4134
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 2% × 3
= $3900 ×2/100 × 3
= 3900 × 2 × 3/100
= 7800 × 3/100
= 23400/100
= $234
Thus, Simple Interest = $234
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 + $234
= $4134
Thus, Amount to be paid = $4134 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) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 2% × 3)
= $3900 + ($3900 ×2/100 × 3)
= $3900 + (3900 × 2 × 3/100)
= $3900 + (7800 × 3/100)
= $3900 + (23400/100)
= $3900 + $234 = $4134
Thus, Amount (A) to be paid = $4134 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 $3900, the simple interest in 1 year
= 2/100 × 3900
= 2 × 3900/100
= 7800/100 = $78
Thus, simple interest for 1 year = $78
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $78 × 3 = $234
Thus, Simple Interest (SI) = $234
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $234
= $4134
Thus, Amount to be paid = $4134 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(2) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?
(3) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(5) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 3 years.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(8) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
(10) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7421 to clear the loan, then find the time period of the loan.