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) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.
(2) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.
(4) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 10% simple interest?
(5) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?
(7) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.
(9) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.