Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.
Correct Answer
$4187
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 2% × 3
= $3950 ×2/100 × 3
= 3950 × 2 × 3/100
= 7900 × 3/100
= 23700/100
= $237
Thus, Simple Interest = $237
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 = $3950 + $237
= $4187
Thus, Amount to be paid = $4187 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 = $3950
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3950 + ($3950 × 2% × 3)
= $3950 + ($3950 ×2/100 × 3)
= $3950 + (3950 × 2 × 3/100)
= $3950 + (7900 × 3/100)
= $3950 + (23700/100)
= $3950 + $237 = $4187
Thus, Amount (A) to be paid = $4187 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 $3950, the simple interest in 1 year
= 2/100 × 3950
= 2 × 3950/100
= 7900/100 = $79
Thus, simple interest for 1 year = $79
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $79 × 3 = $237
Thus, Simple Interest (SI) = $237
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $237
= $4187
Thus, Amount to be paid = $4187 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(3) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(5) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(6) Susan had to pay $3869 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.
(9) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12800 to clear the loan, then find the time period of the loan.
(10) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.