Question:
Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
Correct Answer
$3456
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 2% × 4
= $3200 ×2/100 × 4
= 3200 × 2 × 4/100
= 6400 × 4/100
= 25600/100
= $256
Thus, Simple Interest = $256
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 = $3200 + $256
= $3456
Thus, Amount to be paid = $3456 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 = $3200
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 2% × 4)
= $3200 + ($3200 ×2/100 × 4)
= $3200 + (3200 × 2 × 4/100)
= $3200 + (6400 × 4/100)
= $3200 + (25600/100)
= $3200 + $256 = $3456
Thus, Amount (A) to be paid = $3456 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 $3200, the simple interest in 1 year
= 2/100 × 3200
= 2 × 3200/100
= 6400/100 = $64
Thus, simple interest for 1 year = $64
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $64 × 4 = $256
Thus, Simple Interest (SI) = $256
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $256
= $3456
Thus, Amount to be paid = $3456 Answer
Similar Questions
(1) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?
(2) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?
(7) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 10% simple interest?
(8) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.
(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.