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) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(2) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
(5) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(6) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(8) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?