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) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(2) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(4) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(5) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(10) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.