Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?
Correct Answer
$3864
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 6% × 2
= $3450 ×6/100 × 2
= 3450 × 6 × 2/100
= 20700 × 2/100
= 41400/100
= $414
Thus, Simple Interest = $414
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 = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 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 = $3450
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 6% × 2)
= $3450 + ($3450 ×6/100 × 2)
= $3450 + (3450 × 6 × 2/100)
= $3450 + (20700 × 2/100)
= $3450 + (41400/100)
= $3450 + $414 = $3864
Thus, Amount (A) to be paid = $3864 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 $3450, the simple interest in 1 year
= 6/100 × 3450
= 6 × 3450/100
= 20700/100 = $207
Thus, simple interest for 1 year = $207
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $207 × 2 = $414
Thus, Simple Interest (SI) = $414
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.
(4) Calculate the amount due if Richard borrowed a sum of $3600 at 10% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(6) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?
(7) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?
(8) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 8 years.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(10) Kenneth had to pay $5750 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.