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) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(3) Margaret had to pay $4611 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(5) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(7) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(9) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.