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) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 3 years.
(3) How much loan did Jacob borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9200 to clear it?
(4) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(5) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 6% simple interest?
(8) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(10) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.