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) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(2) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(4) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(8) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(9) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.