Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
Correct Answer
$4212
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 2% × 4
= $3900 ×2/100 × 4
= 3900 × 2 × 4/100
= 7800 × 4/100
= 31200/100
= $312
Thus, Simple Interest = $312
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 = $3900 + $312
= $4212
Thus, Amount to be paid = $4212 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 = $3900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 2% × 4)
= $3900 + ($3900 ×2/100 × 4)
= $3900 + (3900 × 2 × 4/100)
= $3900 + (7800 × 4/100)
= $3900 + (31200/100)
= $3900 + $312 = $4212
Thus, Amount (A) to be paid = $4212 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 $3900, the simple interest in 1 year
= 2/100 × 3900
= 2 × 3900/100
= 7800/100 = $78
Thus, simple interest for 1 year = $78
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $78 × 4 = $312
Thus, Simple Interest (SI) = $312
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $312
= $4212
Thus, Amount to be paid = $4212 Answer
Similar Questions
(1) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 5% simple interest?
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 3 years.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 6% simple interest?
(5) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?
(7) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.