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) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(3) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9840 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.
(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?
(9) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?