Question:
What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
Correct Answer
$4368
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 6% × 2
= $3900 ×6/100 × 2
= 3900 × 6 × 2/100
= 23400 × 2/100
= 46800/100
= $468
Thus, Simple Interest = $468
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 = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 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 = $3900
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 6% × 2)
= $3900 + ($3900 ×6/100 × 2)
= $3900 + (3900 × 6 × 2/100)
= $3900 + (23400 × 2/100)
= $3900 + (46800/100)
= $3900 + $468 = $4368
Thus, Amount (A) to be paid = $4368 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 $3900, the simple interest in 1 year
= 6/100 × 3900
= 6 × 3900/100
= 23400/100 = $234
Thus, simple interest for 1 year = $234
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $234 × 2 = $468
Thus, Simple Interest (SI) = $468
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 Answer
Similar Questions
(1) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?
(2) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?
(3) Daniel had to pay $4592 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 8 years.
(5) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(6) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(7) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(8) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(10) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?