Question:
What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
Correct Answer
$3717
Solution And Explanation
Solution
Given,
Principal (P) = $3150
Rate of Simple Interest (SI) = 9%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3150 × 9% × 2
= $3150 ×9/100 × 2
= 3150 × 9 × 2/100
= 28350 × 2/100
= 56700/100
= $567
Thus, Simple Interest = $567
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 = $3150 + $567
= $3717
Thus, Amount to be paid = $3717 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 = $3150
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3150 + ($3150 × 9% × 2)
= $3150 + ($3150 ×9/100 × 2)
= $3150 + (3150 × 9 × 2/100)
= $3150 + (28350 × 2/100)
= $3150 + (56700/100)
= $3150 + $567 = $3717
Thus, Amount (A) to be paid = $3717 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3150, the simple interest in 1 year
= 9/100 × 3150
= 9 × 3150/100
= 28350/100 = $283.5
Thus, simple interest for 1 year = $283.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $283.5 × 2 = $567
Thus, Simple Interest (SI) = $567
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $567
= $3717
Thus, Amount to be paid = $3717 Answer
Similar Questions
(1) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(2) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
(5) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.
(6) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9384 to clear the loan, then find the time period of the loan.
(7) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?
(8) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 4 years.
(9) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(10) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.