Question:
What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
Correct Answer
$3596
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 8% × 2
= $3100 ×8/100 × 2
= 3100 × 8 × 2/100
= 24800 × 2/100
= 49600/100
= $496
Thus, Simple Interest = $496
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 = $3100 + $496
= $3596
Thus, Amount to be paid = $3596 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 = $3100
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 8% × 2)
= $3100 + ($3100 ×8/100 × 2)
= $3100 + (3100 × 8 × 2/100)
= $3100 + (24800 × 2/100)
= $3100 + (49600/100)
= $3100 + $496 = $3596
Thus, Amount (A) to be paid = $3596 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 $3100, the simple interest in 1 year
= 8/100 × 3100
= 8 × 3100/100
= 24800/100 = $248
Thus, simple interest for 1 year = $248
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $248 × 2 = $496
Thus, Simple Interest (SI) = $496
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $496
= $3596
Thus, Amount to be paid = $3596 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.
(2) How much loan did Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(3) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Lisa had to pay $4414.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?
(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11584 to clear the loan, then find the time period of the loan.
(7) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?
(8) 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?
(9) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(10) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.