Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 8% simple interest?
Correct Answer
$4060
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 8% × 2
= $3500 ×8/100 × 2
= 3500 × 8 × 2/100
= 28000 × 2/100
= 56000/100
= $560
Thus, Simple Interest = $560
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 = $3500 + $560
= $4060
Thus, Amount to be paid = $4060 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 = $3500
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 8% × 2)
= $3500 + ($3500 ×8/100 × 2)
= $3500 + (3500 × 8 × 2/100)
= $3500 + (28000 × 2/100)
= $3500 + (56000/100)
= $3500 + $560 = $4060
Thus, Amount (A) to be paid = $4060 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 $3500, the simple interest in 1 year
= 8/100 × 3500
= 8 × 3500/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $280 × 2 = $560
Thus, Simple Interest (SI) = $560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $560
= $4060
Thus, Amount to be paid = $4060 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(2) How much loan did Barbara borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6382.5 to clear it?
(3) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.
(4) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(6) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(8) If Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(10) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.