Question:
What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 8% simple interest?
Correct Answer
$4640
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 8% × 2
= $4000 ×8/100 × 2
= 4000 × 8 × 2/100
= 32000 × 2/100
= 64000/100
= $640
Thus, Simple Interest = $640
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 = $4000 + $640
= $4640
Thus, Amount to be paid = $4640 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 = $4000
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $4000 + ($4000 × 8% × 2)
= $4000 + ($4000 ×8/100 × 2)
= $4000 + (4000 × 8 × 2/100)
= $4000 + (32000 × 2/100)
= $4000 + (64000/100)
= $4000 + $640 = $4640
Thus, Amount (A) to be paid = $4640 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 $4000, the simple interest in 1 year
= 8/100 × 4000
= 8 × 4000/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $320 × 2 = $640
Thus, Simple Interest (SI) = $640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $640
= $4640
Thus, Amount to be paid = $4640 Answer
Similar Questions
(1) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 8 years.
(8) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(10) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.