Question:
What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?
Correct Answer
$3960
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 5% × 2
= $3600 ×5/100 × 2
= 3600 × 5 × 2/100
= 18000 × 2/100
= 36000/100
= $360
Thus, Simple Interest = $360
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 = $3600 + $360
= $3960
Thus, Amount to be paid = $3960 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 = $3600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 5% × 2)
= $3600 + ($3600 ×5/100 × 2)
= $3600 + (3600 × 5 × 2/100)
= $3600 + (18000 × 2/100)
= $3600 + (36000/100)
= $3600 + $360 = $3960
Thus, Amount (A) to be paid = $3960 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 $3600, the simple interest in 1 year
= 5/100 × 3600
= 5 × 3600/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $180 × 2 = $360
Thus, Simple Interest (SI) = $360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $360
= $3960
Thus, Amount to be paid = $3960 Answer
Similar Questions
(1) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) How much loan did Betty borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7500 to clear it?
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 8 years.
(4) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 3 years.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(6) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(9) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(10) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?