Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
Correct Answer
$4366
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 9% × 2
= $3700 ×9/100 × 2
= 3700 × 9 × 2/100
= 33300 × 2/100
= 66600/100
= $666
Thus, Simple Interest = $666
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 = $3700 + $666
= $4366
Thus, Amount to be paid = $4366 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 = $3700
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 9% × 2)
= $3700 + ($3700 ×9/100 × 2)
= $3700 + (3700 × 9 × 2/100)
= $3700 + (33300 × 2/100)
= $3700 + (66600/100)
= $3700 + $666 = $4366
Thus, Amount (A) to be paid = $4366 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 $3700, the simple interest in 1 year
= 9/100 × 3700
= 9 × 3700/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $333 × 2 = $666
Thus, Simple Interest (SI) = $666
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $666
= $4366
Thus, Amount to be paid = $4366 Answer
Similar Questions
(1) What amount will be due after 2 years if James borrowed a sum of $3000 at a 6% simple interest?
(2) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7687.5 to clear it?
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
(5) How much loan did Karen borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7437.5 to clear it?
(6) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?
(8) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(9) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.
(10) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.