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) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 7% simple interest?
(3) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(4) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(7) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(8) What amount does John have to pay after 5 years if he takes a loan of $3200 at 7% simple interest?
(9) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(10) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9943 to clear the loan, then find the time period of the loan.