Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
Correct Answer
$4130
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 9% × 2
= $3500 ×9/100 × 2
= 3500 × 9 × 2/100
= 31500 × 2/100
= 63000/100
= $630
Thus, Simple Interest = $630
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 = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 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 = $3500
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 9% × 2)
= $3500 + ($3500 ×9/100 × 2)
= $3500 + (3500 × 9 × 2/100)
= $3500 + (31500 × 2/100)
= $3500 + (63000/100)
= $3500 + $630 = $4130
Thus, Amount (A) to be paid = $4130 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 $3500, the simple interest in 1 year
= 9/100 × 3500
= 9 × 3500/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $315 × 2 = $630
Thus, Simple Interest (SI) = $630
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.
(2) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(3) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(7) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(8) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(10) Richard had to pay $3924 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.