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) If James paid $3360 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6120 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.
(4) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(6) 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?
(7) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9676 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(9) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 8 years.