Question:
What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
Correct Answer
$4312
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 6% × 2
= $3850 ×6/100 × 2
= 3850 × 6 × 2/100
= 23100 × 2/100
= 46200/100
= $462
Thus, Simple Interest = $462
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 = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 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 = $3850
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3850 + ($3850 × 6% × 2)
= $3850 + ($3850 ×6/100 × 2)
= $3850 + (3850 × 6 × 2/100)
= $3850 + (23100 × 2/100)
= $3850 + (46200/100)
= $3850 + $462 = $4312
Thus, Amount (A) to be paid = $4312 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 $3850, the simple interest in 1 year
= 6/100 × 3850
= 6 × 3850/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $231 × 2 = $462
Thus, Simple Interest (SI) = $462
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 Answer
Similar Questions
(1) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 5% simple interest for 7 years.
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $5984 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 7 years.
(7) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(9) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
(10) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.