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 after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(5) Susan had to pay $3869 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(7) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.
(9) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.