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 Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(2) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.
(4) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.
(5) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.
(6) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 7% simple interest?
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(8) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(9) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3150 will amount to $3780 at a simple interest of 5% per annum?