Question:
What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 8% simple interest?
Correct Answer
$3654
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 8% × 2
= $3150 ×8/100 × 2
= 3150 × 8 × 2/100
= 25200 × 2/100
= 50400/100
= $504
Thus, Simple Interest = $504
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 = $3150 + $504
= $3654
Thus, Amount to be paid = $3654 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 = $3150
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3150 + ($3150 × 8% × 2)
= $3150 + ($3150 ×8/100 × 2)
= $3150 + (3150 × 8 × 2/100)
= $3150 + (25200 × 2/100)
= $3150 + (50400/100)
= $3150 + $504 = $3654
Thus, Amount (A) to be paid = $3654 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 $3150, the simple interest in 1 year
= 8/100 × 3150
= 8 × 3150/100
= 25200/100 = $252
Thus, simple interest for 1 year = $252
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $252 × 2 = $504
Thus, Simple Interest (SI) = $504
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $504
= $3654
Thus, Amount to be paid = $3654 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(3) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(4) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(5) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10860 to clear the loan, then find the time period of the loan.
(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(7) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(9) What amount does James have to pay after 6 years if he takes a loan of $3000 at 5% simple interest?
(10) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.