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) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 8 years.
(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
(5) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) 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.
(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
(8) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $10000 to clear the loan, then find the time period of the loan.
(9) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 4% simple interest?