Question:
What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 8% simple interest?
Correct Answer
$3886
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 8% × 2
= $3350 ×8/100 × 2
= 3350 × 8 × 2/100
= 26800 × 2/100
= 53600/100
= $536
Thus, Simple Interest = $536
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 = $3350 + $536
= $3886
Thus, Amount to be paid = $3886 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 = $3350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 8% × 2)
= $3350 + ($3350 ×8/100 × 2)
= $3350 + (3350 × 8 × 2/100)
= $3350 + (26800 × 2/100)
= $3350 + (53600/100)
= $3350 + $536 = $3886
Thus, Amount (A) to be paid = $3886 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 $3350, the simple interest in 1 year
= 8/100 × 3350
= 8 × 3350/100
= 26800/100 = $268
Thus, simple interest for 1 year = $268
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $268 × 2 = $536
Thus, Simple Interest (SI) = $536
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $536
= $3886
Thus, Amount to be paid = $3886 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
(4) Kenneth had to pay $5450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) How much loan did Jessica borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6900 to clear it?
(6) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 8 years.
(7) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(8) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 5% simple interest?
(10) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?