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) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(2) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(3) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(5) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.
(7) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 5% simple interest?
(9) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(10) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.