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) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(2) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
(4) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 9% simple interest?
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 7 years.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.
(7) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?
(9) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.