Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
Correct Answer
$3944
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 8% × 2
= $3400 ×8/100 × 2
= 3400 × 8 × 2/100
= 27200 × 2/100
= 54400/100
= $544
Thus, Simple Interest = $544
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 = $3400 + $544
= $3944
Thus, Amount to be paid = $3944 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 = $3400
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 8% × 2)
= $3400 + ($3400 ×8/100 × 2)
= $3400 + (3400 × 8 × 2/100)
= $3400 + (27200 × 2/100)
= $3400 + (54400/100)
= $3400 + $544 = $3944
Thus, Amount (A) to be paid = $3944 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 $3400, the simple interest in 1 year
= 8/100 × 3400
= 8 × 3400/100
= 27200/100 = $272
Thus, simple interest for 1 year = $272
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $272 × 2 = $544
Thus, Simple Interest (SI) = $544
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $544
= $3944
Thus, Amount to be paid = $3944 Answer
Similar Questions
(1) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 7% simple interest?
(2) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(3) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 7 years.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?
(6) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.
(7) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.