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) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.
(4) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(6) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?
(8) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
(10) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.