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) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(2) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(3) If Susan paid $4380 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.
(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
(6) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(8) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(9) How much loan did Linda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6152.5 to clear it?
(10) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.