Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?
Correct Answer
$4118
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 8% × 2
= $3550 ×8/100 × 2
= 3550 × 8 × 2/100
= 28400 × 2/100
= 56800/100
= $568
Thus, Simple Interest = $568
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 = $3550 + $568
= $4118
Thus, Amount to be paid = $4118 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 = $3550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 8% × 2)
= $3550 + ($3550 ×8/100 × 2)
= $3550 + (3550 × 8 × 2/100)
= $3550 + (28400 × 2/100)
= $3550 + (56800/100)
= $3550 + $568 = $4118
Thus, Amount (A) to be paid = $4118 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 $3550, the simple interest in 1 year
= 8/100 × 3550
= 8 × 3550/100
= 28400/100 = $284
Thus, simple interest for 1 year = $284
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $284 × 2 = $568
Thus, Simple Interest (SI) = $568
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $568
= $4118
Thus, Amount to be paid = $4118 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 7 years.
(4) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 8% simple interest?
(6) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(8) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
(9) How much loan did John borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5980 to clear it?
(10) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.