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 if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(3) 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.
(4) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.
(5) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.
(6) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(8) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 8 years.