Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.
Correct Answer
$3888
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 2% × 4
= $3600 ×2/100 × 4
= 3600 × 2 × 4/100
= 7200 × 4/100
= 28800/100
= $288
Thus, Simple Interest = $288
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 = $3600 + $288
= $3888
Thus, Amount to be paid = $3888 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 = $3600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 2% × 4)
= $3600 + ($3600 ×2/100 × 4)
= $3600 + (3600 × 2 × 4/100)
= $3600 + (7200 × 4/100)
= $3600 + (28800/100)
= $3600 + $288 = $3888
Thus, Amount (A) to be paid = $3888 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 $3600, the simple interest in 1 year
= 2/100 × 3600
= 2 × 3600/100
= 7200/100 = $72
Thus, simple interest for 1 year = $72
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $72 × 4 = $288
Thus, Simple Interest (SI) = $288
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $288
= $3888
Thus, Amount to be paid = $3888 Answer
Similar Questions
(1) If Elizabeth paid $4002 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 9% simple interest?
(3) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?
(4) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(5) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10317 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 4 years.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(9) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.