Question:
What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 8% simple interest?
Correct Answer
$3828
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 8% × 2
= $3300 ×8/100 × 2
= 3300 × 8 × 2/100
= 26400 × 2/100
= 52800/100
= $528
Thus, Simple Interest = $528
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 = $3300 + $528
= $3828
Thus, Amount to be paid = $3828 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 = $3300
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 8% × 2)
= $3300 + ($3300 ×8/100 × 2)
= $3300 + (3300 × 8 × 2/100)
= $3300 + (26400 × 2/100)
= $3300 + (52800/100)
= $3300 + $528 = $3828
Thus, Amount (A) to be paid = $3828 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 $3300, the simple interest in 1 year
= 8/100 × 3300
= 8 × 3300/100
= 26400/100 = $264
Thus, simple interest for 1 year = $264
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $264 × 2 = $528
Thus, Simple Interest (SI) = $528
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $528
= $3828
Thus, Amount to be paid = $3828 Answer
Similar Questions
(1) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 7 years.
(3) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 4 years.
(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(8) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 4 years.
(9) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(10) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.