Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
Correct Answer
$3808
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 6% × 2
= $3400 ×6/100 × 2
= 3400 × 6 × 2/100
= 20400 × 2/100
= 40800/100
= $408
Thus, Simple Interest = $408
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 = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 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 = $3400
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 6% × 2)
= $3400 + ($3400 ×6/100 × 2)
= $3400 + (3400 × 6 × 2/100)
= $3400 + (20400 × 2/100)
= $3400 + (40800/100)
= $3400 + $408 = $3808
Thus, Amount (A) to be paid = $3808 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 $3400, the simple interest in 1 year
= 6/100 × 3400
= 6 × 3400/100
= 20400/100 = $204
Thus, simple interest for 1 year = $204
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $204 × 2 = $408
Thus, Simple Interest (SI) = $408
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 Answer
Similar Questions
(1) If David paid $3944 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Mark had to pay $5060 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Barbara had to pay $4082.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.
(5) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7216 to clear the loan, then find the time period of the loan.
(6) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(7) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(10) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.