Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 6% simple interest?
Correct Answer
$4088
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 6% × 2
= $3650 ×6/100 × 2
= 3650 × 6 × 2/100
= 21900 × 2/100
= 43800/100
= $438
Thus, Simple Interest = $438
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 = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 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 = $3650
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 6% × 2)
= $3650 + ($3650 ×6/100 × 2)
= $3650 + (3650 × 6 × 2/100)
= $3650 + (21900 × 2/100)
= $3650 + (43800/100)
= $3650 + $438 = $4088
Thus, Amount (A) to be paid = $4088 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 $3650, the simple interest in 1 year
= 6/100 × 3650
= 6 × 3650/100
= 21900/100 = $219
Thus, simple interest for 1 year = $219
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $219 × 2 = $438
Thus, Simple Interest (SI) = $438
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 Answer
Similar Questions
(1) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?
(2) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(6) In how much time a principal of $3000 will amount to $3180 at a simple interest of 2% per annum?
(7) How much loan did Amanda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8580 to clear it?
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 4 years.
(10) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?