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 if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
(3) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(4) How much loan did Steven borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7920 to clear it?
(5) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(7) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 8 years.
(9) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.