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) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(2) In how much time a principal of $3000 will amount to $3600 at a simple interest of 5% per annum?
(3) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 8% simple interest?
(6) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8791 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(8) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(10) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?