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) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.
(4) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(7) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $12489 to clear the loan, then find the time period of the loan.
(8) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 4% simple interest?