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) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(2) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(5) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(7) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) If Kimberly paid $5208 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(10) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.