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) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 8 years.
(4) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.
(5) How much loan did Jessica borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6325 to clear it?
(6) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.
(8) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?
(9) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?
(10) Elizabeth had to pay $3864 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.