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) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(2) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(3) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.
(4) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.
(7) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.
(9) William had to pay $3920 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.