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) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.
(2) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
(3) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 6% simple interest.
(4) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(6) If Sandra paid $4984 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 4% simple interest?
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.
(9) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.