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) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6854 to clear the loan, then find the time period of the loan.
(2) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(3) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(5) How much loan did Ashley borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7860 to clear it?
(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 3% simple interest?
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(9) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(10) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.