Question:
What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 6% simple interest?
Correct Answer
$4424
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 6% × 2
= $3950 ×6/100 × 2
= 3950 × 6 × 2/100
= 23700 × 2/100
= 47400/100
= $474
Thus, Simple Interest = $474
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 = $3950 + $474
= $4424
Thus, Amount to be paid = $4424 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 = $3950
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 6% × 2)
= $3950 + ($3950 ×6/100 × 2)
= $3950 + (3950 × 6 × 2/100)
= $3950 + (23700 × 2/100)
= $3950 + (47400/100)
= $3950 + $474 = $4424
Thus, Amount (A) to be paid = $4424 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 $3950, the simple interest in 1 year
= 6/100 × 3950
= 6 × 3950/100
= 23700/100 = $237
Thus, simple interest for 1 year = $237
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $237 × 2 = $474
Thus, Simple Interest (SI) = $474
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $474
= $4424
Thus, Amount to be paid = $4424 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(2) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(3) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 8 years.
(6) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $8428 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(8) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(9) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.