Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?
Correct Answer
$4408
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 8% × 2
= $3800 ×8/100 × 2
= 3800 × 8 × 2/100
= 30400 × 2/100
= 60800/100
= $608
Thus, Simple Interest = $608
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 = $3800 + $608
= $4408
Thus, Amount to be paid = $4408 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 = $3800
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 8% × 2)
= $3800 + ($3800 ×8/100 × 2)
= $3800 + (3800 × 8 × 2/100)
= $3800 + (30400 × 2/100)
= $3800 + (60800/100)
= $3800 + $608 = $4408
Thus, Amount (A) to be paid = $4408 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 $3800, the simple interest in 1 year
= 8/100 × 3800
= 8 × 3800/100
= 30400/100 = $304
Thus, simple interest for 1 year = $304
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $304 × 2 = $608
Thus, Simple Interest (SI) = $608
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $608
= $4408
Thus, Amount to be paid = $4408 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.
(3) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 6% simple interest.
(5) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 9% simple interest?
(6) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 7% simple interest?
(7) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(9) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.