Question:
What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
Correct Answer
$4524
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 8% × 2
= $3900 ×8/100 × 2
= 3900 × 8 × 2/100
= 31200 × 2/100
= 62400/100
= $624
Thus, Simple Interest = $624
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 = $3900 + $624
= $4524
Thus, Amount to be paid = $4524 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 = $3900
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 8% × 2)
= $3900 + ($3900 ×8/100 × 2)
= $3900 + (3900 × 8 × 2/100)
= $3900 + (31200 × 2/100)
= $3900 + (62400/100)
= $3900 + $624 = $4524
Thus, Amount (A) to be paid = $4524 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 $3900, the simple interest in 1 year
= 8/100 × 3900
= 8 × 3900/100
= 31200/100 = $312
Thus, simple interest for 1 year = $312
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $312 × 2 = $624
Thus, Simple Interest (SI) = $624
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $624
= $4524
Thus, Amount to be paid = $4524 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(2) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(3) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.
(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(7) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 7 years.
(9) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.