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) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?
(2) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(3) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
(5) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(6) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.
(7) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 9% simple interest?
(8) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(9) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 8 years.