Question:
Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
Correct Answer
$3348
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 2% × 4
= $3100 ×2/100 × 4
= 3100 × 2 × 4/100
= 6200 × 4/100
= 24800/100
= $248
Thus, Simple Interest = $248
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 = $3100 + $248
= $3348
Thus, Amount to be paid = $3348 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 = $3100
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3100 + ($3100 × 2% × 4)
= $3100 + ($3100 ×2/100 × 4)
= $3100 + (3100 × 2 × 4/100)
= $3100 + (6200 × 4/100)
= $3100 + (24800/100)
= $3100 + $248 = $3348
Thus, Amount (A) to be paid = $3348 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 $3100, the simple interest in 1 year
= 2/100 × 3100
= 2 × 3100/100
= 6200/100 = $62
Thus, simple interest for 1 year = $62
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $62 × 4 = $248
Thus, Simple Interest (SI) = $248
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $248
= $3348
Thus, Amount to be paid = $3348 Answer
Similar Questions
(1) How much loan did Jacob borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8800 to clear it?
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 8 years.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 4 years.
(4) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 4% simple interest?
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 3 years.
(8) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(9) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(10) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.