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) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(3) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $13000 to clear the loan, then find the time period of the loan.
(4) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 7 years.
(6) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(8) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.