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) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 4% simple interest?
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(4) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(5) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(6) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(8) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(9) Sandra had to pay $4984 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.