Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
Correct Answer
$3835
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 9% × 2
= $3250 ×9/100 × 2
= 3250 × 9 × 2/100
= 29250 × 2/100
= 58500/100
= $585
Thus, Simple Interest = $585
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 = $3250 + $585
= $3835
Thus, Amount to be paid = $3835 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 = $3250
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 9% × 2)
= $3250 + ($3250 ×9/100 × 2)
= $3250 + (3250 × 9 × 2/100)
= $3250 + (29250 × 2/100)
= $3250 + (58500/100)
= $3250 + $585 = $3835
Thus, Amount (A) to be paid = $3835 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 $3250, the simple interest in 1 year
= 9/100 × 3250
= 9 × 3250/100
= 29250/100 = $292.5
Thus, simple interest for 1 year = $292.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $292.5 × 2 = $585
Thus, Simple Interest (SI) = $585
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $585
= $3835
Thus, Amount to be paid = $3835 Answer
Similar Questions
(1) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(3) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(4) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(5) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(6) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9676 to clear the loan, then find the time period of the loan.
(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(8) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(9) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 4 years.