Question:
Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 4 years.
Correct Answer
$3402
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 2% × 4
= $3150 ×2/100 × 4
= 3150 × 2 × 4/100
= 6300 × 4/100
= 25200/100
= $252
Thus, Simple Interest = $252
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 = $3150 + $252
= $3402
Thus, Amount to be paid = $3402 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 = $3150
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3150 + ($3150 × 2% × 4)
= $3150 + ($3150 ×2/100 × 4)
= $3150 + (3150 × 2 × 4/100)
= $3150 + (6300 × 4/100)
= $3150 + (25200/100)
= $3150 + $252 = $3402
Thus, Amount (A) to be paid = $3402 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 $3150, the simple interest in 1 year
= 2/100 × 3150
= 2 × 3150/100
= 6300/100 = $63
Thus, simple interest for 1 year = $63
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $63 × 4 = $252
Thus, Simple Interest (SI) = $252
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $252
= $3402
Thus, Amount to be paid = $3402 Answer
Similar Questions
(1) If Elizabeth paid $3726 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
(3) 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.
(4) How much loan did Jason borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9240 to clear it?
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
(6) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.
(8) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?
(10) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 7% simple interest.