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) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
(3) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7240 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(6) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 7% simple interest?
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(9) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 4% simple interest?