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) What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.
(3) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.
(4) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(5) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(7) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(9) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(10) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.