Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
Correct Answer
$3640
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 6% × 2
= $3250 ×6/100 × 2
= 3250 × 6 × 2/100
= 19500 × 2/100
= 39000/100
= $390
Thus, Simple Interest = $390
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 = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 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 = $3250
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 6% × 2)
= $3250 + ($3250 ×6/100 × 2)
= $3250 + (3250 × 6 × 2/100)
= $3250 + (19500 × 2/100)
= $3250 + (39000/100)
= $3250 + $390 = $3640
Thus, Amount (A) to be paid = $3640 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 $3250, the simple interest in 1 year
= 6/100 × 3250
= 6 × 3250/100
= 19500/100 = $195
Thus, simple interest for 1 year = $195
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $195 × 2 = $390
Thus, Simple Interest (SI) = $390
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.
(4) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?
(5) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 4 years.
(7) How much loan did George borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8395 to clear it?
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 9% simple interest?
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.