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) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 4 years.
(3) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(4) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?
(6) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?
(7) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 8 years.
(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?