Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 5% simple interest?
Correct Answer
$4180
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 5% × 2
= $3800 ×5/100 × 2
= 3800 × 5 × 2/100
= 19000 × 2/100
= 38000/100
= $380
Thus, Simple Interest = $380
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 = $3800 + $380
= $4180
Thus, Amount to be paid = $4180 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 = $3800
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 5% × 2)
= $3800 + ($3800 ×5/100 × 2)
= $3800 + (3800 × 5 × 2/100)
= $3800 + (19000 × 2/100)
= $3800 + (38000/100)
= $3800 + $380 = $4180
Thus, Amount (A) to be paid = $4180 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 $3800, the simple interest in 1 year
= 5/100 × 3800
= 5 × 3800/100
= 19000/100 = $190
Thus, simple interest for 1 year = $190
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $190 × 2 = $380
Thus, Simple Interest (SI) = $380
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $380
= $4180
Thus, Amount to be paid = $4180 Answer
Similar Questions
(1) How much loan did Thomas borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7250 to clear it?
(2) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(4) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 8% simple interest?
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(6) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(9) If Donna paid $5626 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?