Question:
Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.
Correct Answer
$3780
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 2% × 4
= $3500 ×2/100 × 4
= 3500 × 2 × 4/100
= 7000 × 4/100
= 28000/100
= $280
Thus, Simple Interest = $280
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 = $3500 + $280
= $3780
Thus, Amount to be paid = $3780 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 = $3500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 2% × 4)
= $3500 + ($3500 ×2/100 × 4)
= $3500 + (3500 × 2 × 4/100)
= $3500 + (7000 × 4/100)
= $3500 + (28000/100)
= $3500 + $280 = $3780
Thus, Amount (A) to be paid = $3780 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 $3500, the simple interest in 1 year
= 2/100 × 3500
= 2 × 3500/100
= 7000/100 = $70
Thus, simple interest for 1 year = $70
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $70 × 4 = $280
Thus, Simple Interest (SI) = $280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $280
= $3780
Thus, Amount to be paid = $3780 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(3) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(4) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.
(7) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?
(9) If Steven paid $4968 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 will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?