Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 6% simple interest?
Correct Answer
$4144
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 6% × 2
= $3700 ×6/100 × 2
= 3700 × 6 × 2/100
= 22200 × 2/100
= 44400/100
= $444
Thus, Simple Interest = $444
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 = $3700 + $444
= $4144
Thus, Amount to be paid = $4144 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 = $3700
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 6% × 2)
= $3700 + ($3700 ×6/100 × 2)
= $3700 + (3700 × 6 × 2/100)
= $3700 + (22200 × 2/100)
= $3700 + (44400/100)
= $3700 + $444 = $4144
Thus, Amount (A) to be paid = $4144 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 $3700, the simple interest in 1 year
= 6/100 × 3700
= 6 × 3700/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $222 × 2 = $444
Thus, Simple Interest (SI) = $444
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $444
= $4144
Thus, Amount to be paid = $4144 Answer
Similar Questions
(1) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(4) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(8) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8688 to clear the loan, then find the time period of the loan.
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.