Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
Correct Answer
$4292
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 8% × 2
= $3700 ×8/100 × 2
= 3700 × 8 × 2/100
= 29600 × 2/100
= 59200/100
= $592
Thus, Simple Interest = $592
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 = $3700 + $592
= $4292
Thus, Amount to be paid = $4292 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 = $3700
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 8% × 2)
= $3700 + ($3700 ×8/100 × 2)
= $3700 + (3700 × 8 × 2/100)
= $3700 + (29600 × 2/100)
= $3700 + (59200/100)
= $3700 + $592 = $4292
Thus, Amount (A) to be paid = $4292 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 $3700, the simple interest in 1 year
= 8/100 × 3700
= 8 × 3700/100
= 29600/100 = $296
Thus, simple interest for 1 year = $296
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $296 × 2 = $592
Thus, Simple Interest (SI) = $592
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $592
= $4292
Thus, Amount to be paid = $4292 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 3 years.
(2) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(5) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
(7) 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.
(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?