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) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.
(3) Linda had to pay $3651.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?
(5) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(6) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3100 will amount to $3286 at a simple interest of 3% per annum?
(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.