Question:
What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 8% simple interest?
Correct Answer
$4582
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 8% × 2
= $3950 ×8/100 × 2
= 3950 × 8 × 2/100
= 31600 × 2/100
= 63200/100
= $632
Thus, Simple Interest = $632
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 = $3950 + $632
= $4582
Thus, Amount to be paid = $4582 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 = $3950
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 8% × 2)
= $3950 + ($3950 ×8/100 × 2)
= $3950 + (3950 × 8 × 2/100)
= $3950 + (31600 × 2/100)
= $3950 + (63200/100)
= $3950 + $632 = $4582
Thus, Amount (A) to be paid = $4582 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 $3950, the simple interest in 1 year
= 8/100 × 3950
= 8 × 3950/100
= 31600/100 = $316
Thus, simple interest for 1 year = $316
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $316 × 2 = $632
Thus, Simple Interest (SI) = $632
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $632
= $4582
Thus, Amount to be paid = $4582 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(2) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(6) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(7) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.
(9) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?