Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
Correct Answer
$4307
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 9% × 2
= $3650 ×9/100 × 2
= 3650 × 9 × 2/100
= 32850 × 2/100
= 65700/100
= $657
Thus, Simple Interest = $657
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 = $3650 + $657
= $4307
Thus, Amount to be paid = $4307 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 = $3650
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 9% × 2)
= $3650 + ($3650 ×9/100 × 2)
= $3650 + (3650 × 9 × 2/100)
= $3650 + (32850 × 2/100)
= $3650 + (65700/100)
= $3650 + $657 = $4307
Thus, Amount (A) to be paid = $4307 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 $3650, the simple interest in 1 year
= 9/100 × 3650
= 9 × 3650/100
= 32850/100 = $328.5
Thus, simple interest for 1 year = $328.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $328.5 × 2 = $657
Thus, Simple Interest (SI) = $657
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $657
= $4307
Thus, Amount to be paid = $4307 Answer
Similar Questions
(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
(3) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(4) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(8) If Linda borrowed $3350 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(10) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.