Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
Correct Answer
$4050
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 2% × 4
= $3750 ×2/100 × 4
= 3750 × 2 × 4/100
= 7500 × 4/100
= 30000/100
= $300
Thus, Simple Interest = $300
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 = $3750 + $300
= $4050
Thus, Amount to be paid = $4050 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 = $3750
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 2% × 4)
= $3750 + ($3750 ×2/100 × 4)
= $3750 + (3750 × 2 × 4/100)
= $3750 + (7500 × 4/100)
= $3750 + (30000/100)
= $3750 + $300 = $4050
Thus, Amount (A) to be paid = $4050 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 $3750, the simple interest in 1 year
= 2/100 × 3750
= 2 × 3750/100
= 7500/100 = $75
Thus, simple interest for 1 year = $75
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $75 × 4 = $300
Thus, Simple Interest (SI) = $300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $300
= $4050
Thus, Amount to be paid = $4050 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(2) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(3) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?
(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.
(5) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?
(6) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?
(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 4 years.
(9) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.