Question:
What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
Correct Answer
$3538
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 8%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3050 × 8% × 2
= $3050 ×8/100 × 2
= 3050 × 8 × 2/100
= 24400 × 2/100
= 48800/100
= $488
Thus, Simple Interest = $488
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 = $3050 + $488
= $3538
Thus, Amount to be paid = $3538 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 = $3050
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 8% × 2)
= $3050 + ($3050 ×8/100 × 2)
= $3050 + (3050 × 8 × 2/100)
= $3050 + (24400 × 2/100)
= $3050 + (48800/100)
= $3050 + $488 = $3538
Thus, Amount (A) to be paid = $3538 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3050, the simple interest in 1 year
= 8/100 × 3050
= 8 × 3050/100
= 24400/100 = $244
Thus, simple interest for 1 year = $244
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $244 × 2 = $488
Thus, Simple Interest (SI) = $488
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $488
= $3538
Thus, Amount to be paid = $3538 Answer
Similar Questions
(1) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?
(2) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(3) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.
(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(7) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.
(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(9) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(10) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.