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) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(6) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(7) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(8) What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?