Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?
Correct Answer
$4002
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 8% × 2
= $3450 ×8/100 × 2
= 3450 × 8 × 2/100
= 27600 × 2/100
= 55200/100
= $552
Thus, Simple Interest = $552
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 = $3450 + $552
= $4002
Thus, Amount to be paid = $4002 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 = $3450
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 8% × 2)
= $3450 + ($3450 ×8/100 × 2)
= $3450 + (3450 × 8 × 2/100)
= $3450 + (27600 × 2/100)
= $3450 + (55200/100)
= $3450 + $552 = $4002
Thus, Amount (A) to be paid = $4002 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 $3450, the simple interest in 1 year
= 8/100 × 3450
= 8 × 3450/100
= 27600/100 = $276
Thus, simple interest for 1 year = $276
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $276 × 2 = $552
Thus, Simple Interest (SI) = $552
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $552
= $4002
Thus, Amount to be paid = $4002 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(4) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(5) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 3 years.
(7) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 7 years.
(10) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.