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) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 3 years.
(2) How much loan did Lisa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6957.5 to clear it?
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(4) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9238 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(6) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(8) If Lisa paid $4374 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.