Question:
Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
Correct Answer
$3240
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 2%
Time (t) = 4 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) = $3000 × 2% × 4
= $3000 ×2/100 × 4
= 3000 × 2 × 4/100
= 6000 × 4/100
= 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 = $3000 + $240
= $3240
Thus, Amount to be paid = $3240 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 = $3000
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 2% × 4)
= $3000 + ($3000 ×2/100 × 4)
= $3000 + (3000 × 2 × 4/100)
= $3000 + (6000 × 4/100)
= $3000 + (24000/100)
= $3000 + $240 = $3240
Thus, Amount (A) to be paid = $3240 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 $3000, the simple interest in 1 year
= 2/100 × 3000
= 2 × 3000/100
= 6000/100 = $60
Thus, simple interest for 1 year = $60
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $60 × 4 = $240
Thus, Simple Interest (SI) = $240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $240
= $3240
Thus, Amount to be paid = $3240 Answer
Similar Questions
(1) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
(4) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(5) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?
(6) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 7 years.
(7) 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.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(10) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.