Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 4 years.
Correct Answer
$3294
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 2% × 4
= $3050 ×2/100 × 4
= 3050 × 2 × 4/100
= 6100 × 4/100
= 24400/100
= $244
Thus, Simple Interest = $244
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 = $3050 + $244
= $3294
Thus, Amount to be paid = $3294 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 = $3050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 2% × 4)
= $3050 + ($3050 ×2/100 × 4)
= $3050 + (3050 × 2 × 4/100)
= $3050 + (6100 × 4/100)
= $3050 + (24400/100)
= $3050 + $244 = $3294
Thus, Amount (A) to be paid = $3294 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 $3050, the simple interest in 1 year
= 2/100 × 3050
= 2 × 3050/100
= 6100/100 = $61
Thus, simple interest for 1 year = $61
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $61 × 4 = $244
Thus, Simple Interest (SI) = $244
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $244
= $3294
Thus, Amount to be paid = $3294 Answer
Similar Questions
(1) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.
(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(3) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 9% simple interest?
(4) In how much time a principal of $3050 will amount to $3416 at a simple interest of 4% per annum?
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(6) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(7) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.