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) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(2) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?
(3) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
(5) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Barbara had to pay $3763 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 10% simple interest.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.