Question:
Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.
Correct Answer
$3672
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 2% × 4
= $3400 ×2/100 × 4
= 3400 × 2 × 4/100
= 6800 × 4/100
= 27200/100
= $272
Thus, Simple Interest = $272
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 = $3400 + $272
= $3672
Thus, Amount to be paid = $3672 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 = $3400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 2% × 4)
= $3400 + ($3400 ×2/100 × 4)
= $3400 + (3400 × 2 × 4/100)
= $3400 + (6800 × 4/100)
= $3400 + (27200/100)
= $3400 + $272 = $3672
Thus, Amount (A) to be paid = $3672 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 $3400, the simple interest in 1 year
= 2/100 × 3400
= 2 × 3400/100
= 6800/100 = $68
Thus, simple interest for 1 year = $68
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $68 × 4 = $272
Thus, Simple Interest (SI) = $272
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $272
= $3672
Thus, Amount to be paid = $3672 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(3) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7700 to clear it?
(4) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(5) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 3 years.
(7) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(8) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(9) If Barbara paid $4260 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.