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 after 10 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(2) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 7 years.
(4) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
(6) Susan had to pay $4197.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(10) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.