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) How much loan did Melissa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8452.5 to clear it?
(2) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(4) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(5) How much loan did Matthew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6820 to clear it?
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
(7) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.
(8) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.