Question:
What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?
Correct Answer
$3520
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 5%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3200 × 5% × 2
= $3200 ×5/100 × 2
= 3200 × 5 × 2/100
= 16000 × 2/100
= 32000/100
= $320
Thus, Simple Interest = $320
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 = $3200 + $320
= $3520
Thus, Amount to be paid = $3520 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 = $3200
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 5% × 2)
= $3200 + ($3200 ×5/100 × 2)
= $3200 + (3200 × 5 × 2/100)
= $3200 + (16000 × 2/100)
= $3200 + (32000/100)
= $3200 + $320 = $3520
Thus, Amount (A) to be paid = $3520 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3200, the simple interest in 1 year
= 5/100 × 3200
= 5 × 3200/100
= 16000/100 = $160
Thus, simple interest for 1 year = $160
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $160 × 2 = $320
Thus, Simple Interest (SI) = $320
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $320
= $3520
Thus, Amount to be paid = $3520 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(2) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
(3) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 8 years.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 7 years.
(7) 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.
(8) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?
(9) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?