Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
Correct Answer
$4015
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 5% × 2
= $3650 ×5/100 × 2
= 3650 × 5 × 2/100
= 18250 × 2/100
= 36500/100
= $365
Thus, Simple Interest = $365
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 = $3650 + $365
= $4015
Thus, Amount to be paid = $4015 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 = $3650
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 5% × 2)
= $3650 + ($3650 ×5/100 × 2)
= $3650 + (3650 × 5 × 2/100)
= $3650 + (18250 × 2/100)
= $3650 + (36500/100)
= $3650 + $365 = $4015
Thus, Amount (A) to be paid = $4015 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 $3650, the simple interest in 1 year
= 5/100 × 3650
= 5 × 3650/100
= 18250/100 = $182.5
Thus, simple interest for 1 year = $182.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $182.5 × 2 = $365
Thus, Simple Interest (SI) = $365
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $365
= $4015
Thus, Amount to be paid = $4015 Answer
Similar Questions
(1) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?
(2) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 10% simple interest?
(3) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 4 years.
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
(6) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(8) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(9) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(10) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.