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) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(2) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.
(3) How much loan did Mark borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7040 to clear it?
(4) What amount will be due after 2 years if David borrowed a sum of $3200 at a 6% simple interest?
(5) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(6) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(7) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(9) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(10) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.