Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
Correct Answer
$3510
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 2% × 4
= $3250 ×2/100 × 4
= 3250 × 2 × 4/100
= 6500 × 4/100
= 26000/100
= $260
Thus, Simple Interest = $260
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 = $3250 + $260
= $3510
Thus, Amount to be paid = $3510 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 = $3250
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 2% × 4)
= $3250 + ($3250 ×2/100 × 4)
= $3250 + (3250 × 2 × 4/100)
= $3250 + (6500 × 4/100)
= $3250 + (26000/100)
= $3250 + $260 = $3510
Thus, Amount (A) to be paid = $3510 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 $3250, the simple interest in 1 year
= 2/100 × 3250
= 2 × 3250/100
= 6500/100 = $65
Thus, simple interest for 1 year = $65
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $65 × 4 = $260
Thus, Simple Interest (SI) = $260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $260
= $3510
Thus, Amount to be paid = $3510 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(2) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 8 years.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 3 years.
(5) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 2% simple interest?
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(8) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 9% simple interest?
(10) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.