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) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 3% simple interest for 4 years.
(4) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?
(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.
(6) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
(7) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?