Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
Correct Answer
$4234
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 8% × 2
= $3650 ×8/100 × 2
= 3650 × 8 × 2/100
= 29200 × 2/100
= 58400/100
= $584
Thus, Simple Interest = $584
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 = $3650 + $584
= $4234
Thus, Amount to be paid = $4234 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 = $3650
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 8% × 2)
= $3650 + ($3650 ×8/100 × 2)
= $3650 + (3650 × 8 × 2/100)
= $3650 + (29200 × 2/100)
= $3650 + (58400/100)
= $3650 + $584 = $4234
Thus, Amount (A) to be paid = $4234 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 $3650, the simple interest in 1 year
= 8/100 × 3650
= 8 × 3650/100
= 29200/100 = $292
Thus, simple interest for 1 year = $292
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $292 × 2 = $584
Thus, Simple Interest (SI) = $584
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $584
= $4234
Thus, Amount to be paid = $4234 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 6% simple interest.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(4) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(6) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
(8) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?
(9) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9540 to clear it?
(10) If Michael paid $3564 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.