Question:
What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
Correct Answer
$3712
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 8% × 2
= $3200 ×8/100 × 2
= 3200 × 8 × 2/100
= 25600 × 2/100
= 51200/100
= $512
Thus, Simple Interest = $512
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 = $3200 + $512
= $3712
Thus, Amount to be paid = $3712 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 = $3200
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 8% × 2)
= $3200 + ($3200 ×8/100 × 2)
= $3200 + (3200 × 8 × 2/100)
= $3200 + (25600 × 2/100)
= $3200 + (51200/100)
= $3200 + $512 = $3712
Thus, Amount (A) to be paid = $3712 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 $3200, the simple interest in 1 year
= 8/100 × 3200
= 8 × 3200/100
= 25600/100 = $256
Thus, simple interest for 1 year = $256
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $256 × 2 = $512
Thus, Simple Interest (SI) = $512
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $512
= $3712
Thus, Amount to be paid = $3712 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3276 at a simple interest of 2% per annum?
(2) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(3) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(4) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(5) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.
(6) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(7) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5712 to clear the loan, then find the time period of the loan.
(8) Andrew had to pay $5088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) If Lisa paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.