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) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(2) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(4) Sandra had to pay $5117.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(6) How much loan did Lisa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6957.5 to clear it?
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.
(8) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(10) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 8% simple interest?