Question:
What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?
Correct Answer
$4235
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 5% × 2
= $3850 ×5/100 × 2
= 3850 × 5 × 2/100
= 19250 × 2/100
= 38500/100
= $385
Thus, Simple Interest = $385
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 = $3850 + $385
= $4235
Thus, Amount to be paid = $4235 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 = $3850
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3850 + ($3850 × 5% × 2)
= $3850 + ($3850 ×5/100 × 2)
= $3850 + (3850 × 5 × 2/100)
= $3850 + (19250 × 2/100)
= $3850 + (38500/100)
= $3850 + $385 = $4235
Thus, Amount (A) to be paid = $4235 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 $3850, the simple interest in 1 year
= 5/100 × 3850
= 5 × 3850/100
= 19250/100 = $192.5
Thus, simple interest for 1 year = $192.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $192.5 × 2 = $385
Thus, Simple Interest (SI) = $385
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $385
= $4235
Thus, Amount to be paid = $4235 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(2) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?
(3) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.
(7) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
(8) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?
(9) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(10) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.