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 if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(2) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?
(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) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(5) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12800 to clear the loan, then find the time period of the loan.
(6) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.
(8) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(10) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.