Question:
What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?
Correct Answer
$4466
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 8% × 2
= $3850 ×8/100 × 2
= 3850 × 8 × 2/100
= 30800 × 2/100
= 61600/100
= $616
Thus, Simple Interest = $616
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 = $3850 + $616
= $4466
Thus, Amount to be paid = $4466 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 = $3850
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3850 + ($3850 × 8% × 2)
= $3850 + ($3850 ×8/100 × 2)
= $3850 + (3850 × 8 × 2/100)
= $3850 + (30800 × 2/100)
= $3850 + (61600/100)
= $3850 + $616 = $4466
Thus, Amount (A) to be paid = $4466 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 $3850, the simple interest in 1 year
= 8/100 × 3850
= 8 × 3850/100
= 30800/100 = $308
Thus, simple interest for 1 year = $308
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $308 × 2 = $616
Thus, Simple Interest (SI) = $616
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $616
= $4466
Thus, Amount to be paid = $4466 Answer
Similar Questions
(1) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 4 years.
(3) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
(4) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(5) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(6) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?
(7) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.
(9) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 3% simple interest?
(10) If Nancy paid $4814 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.