Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
Correct Answer
$4158
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 2% × 4
= $3850 ×2/100 × 4
= 3850 × 2 × 4/100
= 7700 × 4/100
= 30800/100
= $308
Thus, Simple Interest = $308
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 = $3850 + $308
= $4158
Thus, Amount to be paid = $4158 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 = $3850
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 2% × 4)
= $3850 + ($3850 ×2/100 × 4)
= $3850 + (3850 × 2 × 4/100)
= $3850 + (7700 × 4/100)
= $3850 + (30800/100)
= $3850 + $308 = $4158
Thus, Amount (A) to be paid = $4158 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 $3850, the simple interest in 1 year
= 2/100 × 3850
= 2 × 3850/100
= 7700/100 = $77
Thus, simple interest for 1 year = $77
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $77 × 4 = $308
Thus, Simple Interest (SI) = $308
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $308
= $4158
Thus, Amount to be paid = $4158 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(2) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(4) If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(9) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
(10) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?