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) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 7 years.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(4) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(5) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(6) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(8) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(9) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.