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) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 8% simple interest?
(2) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(4) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 7 years.
(7) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(8) Paul had to pay $5264 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 7 years.
(10) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.