Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?
Correct Answer
$4189
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 9% × 2
= $3550 ×9/100 × 2
= 3550 × 9 × 2/100
= 31950 × 2/100
= 63900/100
= $639
Thus, Simple Interest = $639
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 = $3550 + $639
= $4189
Thus, Amount to be paid = $4189 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 = $3550
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 9% × 2)
= $3550 + ($3550 ×9/100 × 2)
= $3550 + (3550 × 9 × 2/100)
= $3550 + (31950 × 2/100)
= $3550 + (63900/100)
= $3550 + $639 = $4189
Thus, Amount (A) to be paid = $4189 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 $3550, the simple interest in 1 year
= 9/100 × 3550
= 9 × 3550/100
= 31950/100 = $319.5
Thus, simple interest for 1 year = $319.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $319.5 × 2 = $639
Thus, Simple Interest (SI) = $639
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $639
= $4189
Thus, Amount to be paid = $4189 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(2) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(3) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 3% simple interest?
(4) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.
(5) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(6) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(8) How much loan did Linda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6152.5 to clear it?
(9) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(10) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.