Question:
What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 9% simple interest?
Correct Answer
$4425
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 9% × 2
= $3750 ×9/100 × 2
= 3750 × 9 × 2/100
= 33750 × 2/100
= 67500/100
= $675
Thus, Simple Interest = $675
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 = $3750 + $675
= $4425
Thus, Amount to be paid = $4425 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 = $3750
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 9% × 2)
= $3750 + ($3750 ×9/100 × 2)
= $3750 + (3750 × 9 × 2/100)
= $3750 + (33750 × 2/100)
= $3750 + (67500/100)
= $3750 + $675 = $4425
Thus, Amount (A) to be paid = $4425 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 $3750, the simple interest in 1 year
= 9/100 × 3750
= 9 × 3750/100
= 33750/100 = $337.5
Thus, simple interest for 1 year = $337.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $337.5 × 2 = $675
Thus, Simple Interest (SI) = $675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $675
= $4425
Thus, Amount to be paid = $4425 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 3 years.
(2) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(3) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(5) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.
(6) How much loan did Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?
(7) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(9) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Emily had to pay $5177.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.