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) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 4 years.
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(5) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(7) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(8) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?
(10) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 10% simple interest?