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) If William paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.
(3) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(4) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(7) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 8 years.
(10) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.