Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
Correct Answer
$3942
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 2% × 4
= $3650 ×2/100 × 4
= 3650 × 2 × 4/100
= 7300 × 4/100
= 29200/100
= $292
Thus, Simple Interest = $292
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 = $3650 + $292
= $3942
Thus, Amount to be paid = $3942 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 = $3650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 2% × 4)
= $3650 + ($3650 ×2/100 × 4)
= $3650 + (3650 × 2 × 4/100)
= $3650 + (7300 × 4/100)
= $3650 + (29200/100)
= $3650 + $292 = $3942
Thus, Amount (A) to be paid = $3942 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 $3650, the simple interest in 1 year
= 2/100 × 3650
= 2 × 3650/100
= 7300/100 = $73
Thus, simple interest for 1 year = $73
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $73 × 4 = $292
Thus, Simple Interest (SI) = $292
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $292
= $3942
Thus, Amount to be paid = $3942 Answer
Similar Questions
(1) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.
(2) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.
(4) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(5) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?
(6) Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 8 years.
(7) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 7 years.
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(10) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?