Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.
Correct Answer
$3618
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 2% × 4
= $3350 ×2/100 × 4
= 3350 × 2 × 4/100
= 6700 × 4/100
= 26800/100
= $268
Thus, Simple Interest = $268
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 = $3350 + $268
= $3618
Thus, Amount to be paid = $3618 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 = $3350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 2% × 4)
= $3350 + ($3350 ×2/100 × 4)
= $3350 + (3350 × 2 × 4/100)
= $3350 + (6700 × 4/100)
= $3350 + (26800/100)
= $3350 + $268 = $3618
Thus, Amount (A) to be paid = $3618 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 $3350, the simple interest in 1 year
= 2/100 × 3350
= 2 × 3350/100
= 6700/100 = $67
Thus, simple interest for 1 year = $67
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $67 × 4 = $268
Thus, Simple Interest (SI) = $268
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $268
= $3618
Thus, Amount to be paid = $3618 Answer
Similar Questions
(1) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
(2) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?
(3) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 7% simple interest?
(4) How much loan did Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(6) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.
(8) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(9) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 8 years.