Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?
Correct Answer
$3770
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 8% × 2
= $3250 ×8/100 × 2
= 3250 × 8 × 2/100
= 26000 × 2/100
= 52000/100
= $520
Thus, Simple Interest = $520
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 = $3250 + $520
= $3770
Thus, Amount to be paid = $3770 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 = $3250
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 2)
= $3250 + ($3250 ×8/100 × 2)
= $3250 + (3250 × 8 × 2/100)
= $3250 + (26000 × 2/100)
= $3250 + (52000/100)
= $3250 + $520 = $3770
Thus, Amount (A) to be paid = $3770 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 $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $260 × 2 = $520
Thus, Simple Interest (SI) = $520
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $520
= $3770
Thus, Amount to be paid = $3770 Answer
Similar Questions
(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 7 years.
(2) Matthew had to pay $4452 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(7) If Paul paid $5452 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(9) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.