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) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.
(2) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 3 years.
(3) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?
(4) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 7 years.
(5) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7421 to clear the loan, then find the time period of the loan.
(6) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
(8) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 8 years.
(10) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.