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) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7310 to clear the loan, then find the time period of the loan.
(2) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(3) Robert had to pay $3565 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8036 to clear the loan, then find the time period of the loan.
(5) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?
(7) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(9) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.