Question:
What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
Correct Answer
$4200
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 6% × 2
= $3750 ×6/100 × 2
= 3750 × 6 × 2/100
= 22500 × 2/100
= 45000/100
= $450
Thus, Simple Interest = $450
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 = $3750 + $450
= $4200
Thus, Amount to be paid = $4200 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 = $3750
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 6% × 2)
= $3750 + ($3750 ×6/100 × 2)
= $3750 + (3750 × 6 × 2/100)
= $3750 + (22500 × 2/100)
= $3750 + (45000/100)
= $3750 + $450 = $4200
Thus, Amount (A) to be paid = $4200 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 $3750, the simple interest in 1 year
= 6/100 × 3750
= 6 × 3750/100
= 22500/100 = $225
Thus, simple interest for 1 year = $225
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $225 × 2 = $450
Thus, Simple Interest (SI) = $450
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $450
= $4200
Thus, Amount to be paid = $4200 Answer
Similar Questions
(1) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11800 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(3) How much loan did Michelle borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8687.5 to clear it?
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(6) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 8 years.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(9) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
(10) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.