Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 3 years.
Correct Answer
$4240
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 2% × 3
= $4000 ×2/100 × 3
= 4000 × 2 × 3/100
= 8000 × 3/100
= 24000/100
= $240
Thus, Simple Interest = $240
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 = $4000 + $240
= $4240
Thus, Amount to be paid = $4240 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 = $4000
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 2% × 3)
= $4000 + ($4000 ×2/100 × 3)
= $4000 + (4000 × 2 × 3/100)
= $4000 + (8000 × 3/100)
= $4000 + (24000/100)
= $4000 + $240 = $4240
Thus, Amount (A) to be paid = $4240 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 $4000, the simple interest in 1 year
= 2/100 × 4000
= 2 × 4000/100
= 8000/100 = $80
Thus, simple interest for 1 year = $80
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $80 × 3 = $240
Thus, Simple Interest (SI) = $240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $240
= $4240
Thus, Amount to be paid = $4240 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 8 years.
(2) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 3 years.
(4) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(8) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(9) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?