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) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(2) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(3) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.
(5) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(8) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(9) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.