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) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.
(2) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?
(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(4) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(7) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 4 years.
(9) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 7 years.