Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
Correct Answer
$3920
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 6% × 2
= $3500 ×6/100 × 2
= 3500 × 6 × 2/100
= 21000 × 2/100
= 42000/100
= $420
Thus, Simple Interest = $420
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 = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 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 = $3500
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 6% × 2)
= $3500 + ($3500 ×6/100 × 2)
= $3500 + (3500 × 6 × 2/100)
= $3500 + (21000 × 2/100)
= $3500 + (42000/100)
= $3500 + $420 = $3920
Thus, Amount (A) to be paid = $3920 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 $3500, the simple interest in 1 year
= 6/100 × 3500
= 6 × 3500/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $210 × 2 = $420
Thus, Simple Interest (SI) = $420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 Answer
Similar Questions
(1) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 9% simple interest?
(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 8 years.
(5) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?
(6) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(7) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 8 years.
(9) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?