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) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(2) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(3) How much loan did Melissa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8820 to clear it?
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(5) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
(8) In how much time a principal of $3000 will amount to $3180 at a simple interest of 3% per annum?
(9) If John paid $3712 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 4 years.