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) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.
(5) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(6) Betty had to pay $4760 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(8) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9020 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(10) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.