Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?
Correct Answer
$3976
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 6% × 2
= $3550 ×6/100 × 2
= 3550 × 6 × 2/100
= 21300 × 2/100
= 42600/100
= $426
Thus, Simple Interest = $426
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 = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 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 = $3550
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 6% × 2)
= $3550 + ($3550 ×6/100 × 2)
= $3550 + (3550 × 6 × 2/100)
= $3550 + (21300 × 2/100)
= $3550 + (42600/100)
= $3550 + $426 = $3976
Thus, Amount (A) to be paid = $3976 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 $3550, the simple interest in 1 year
= 6/100 × 3550
= 6 × 3550/100
= 21300/100 = $213
Thus, simple interest for 1 year = $213
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $213 × 2 = $426
Thus, Simple Interest (SI) = $426
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(3) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3100 will amount to $3565 at a simple interest of 3% per annum?
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(6) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(7) Betty had to pay $4632.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(9) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 7 years.