Question:
( 1 of 10 ) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$3950
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) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(2) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(5) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 7 years.
(8) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(9) How much loan did Timothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8510 to clear it?
(10) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?