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 Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(2) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 5% simple interest?
(3) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 7 years.
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(7) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(8) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.
(9) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(10) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.