Question:
What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 6% simple interest?
Correct Answer
$3528
Solution And Explanation
Solution
Given,
Principal (P) = $3150
Rate of Simple Interest (SI) = 6%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3150 × 6% × 2
= $3150 ×6/100 × 2
= 3150 × 6 × 2/100
= 18900 × 2/100
= 37800/100
= $378
Thus, Simple Interest = $378
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 = $3150 + $378
= $3528
Thus, Amount to be paid = $3528 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 = $3150
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3150 + ($3150 × 6% × 2)
= $3150 + ($3150 ×6/100 × 2)
= $3150 + (3150 × 6 × 2/100)
= $3150 + (18900 × 2/100)
= $3150 + (37800/100)
= $3150 + $378 = $3528
Thus, Amount (A) to be paid = $3528 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3150, the simple interest in 1 year
= 6/100 × 3150
= 6 × 3150/100
= 18900/100 = $189
Thus, simple interest for 1 year = $189
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $189 × 2 = $378
Thus, Simple Interest (SI) = $378
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $378
= $3528
Thus, Amount to be paid = $3528 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.
(2) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(4) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(5) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(6) How much loan did William borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6600 to clear it?
(7) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?
(9) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(10) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?