Question:
What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?
Correct Answer
$4176
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 8% × 2
= $3600 ×8/100 × 2
= 3600 × 8 × 2/100
= 28800 × 2/100
= 57600/100
= $576
Thus, Simple Interest = $576
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 = $3600 + $576
= $4176
Thus, Amount to be paid = $4176 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 = $3600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 8% × 2)
= $3600 + ($3600 ×8/100 × 2)
= $3600 + (3600 × 8 × 2/100)
= $3600 + (28800 × 2/100)
= $3600 + (57600/100)
= $3600 + $576 = $4176
Thus, Amount (A) to be paid = $4176 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 $3600, the simple interest in 1 year
= 8/100 × 3600
= 8 × 3600/100
= 28800/100 = $288
Thus, simple interest for 1 year = $288
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $288 × 2 = $576
Thus, Simple Interest (SI) = $576
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $576
= $4176
Thus, Amount to be paid = $4176 Answer
Similar Questions
(1) How much loan did Steven borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7920 to clear it?
(2) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.
(3) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(4) Charles had to pay $4485 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(6) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 9% simple interest?
(7) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 8% simple interest?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.