Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 4 years.
Correct Answer
$3834
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 2% × 4
= $3550 ×2/100 × 4
= 3550 × 2 × 4/100
= 7100 × 4/100
= 28400/100
= $284
Thus, Simple Interest = $284
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 = $3550 + $284
= $3834
Thus, Amount to be paid = $3834 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 = $3550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 2% × 4)
= $3550 + ($3550 ×2/100 × 4)
= $3550 + (3550 × 2 × 4/100)
= $3550 + (7100 × 4/100)
= $3550 + (28400/100)
= $3550 + $284 = $3834
Thus, Amount (A) to be paid = $3834 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 $3550, the simple interest in 1 year
= 2/100 × 3550
= 2 × 3550/100
= 7100/100 = $71
Thus, simple interest for 1 year = $71
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $71 × 4 = $284
Thus, Simple Interest (SI) = $284
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $284
= $3834
Thus, Amount to be paid = $3834 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) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.
(6) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(8) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 9% simple interest?
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.