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) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(3) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 7 years.
(6) 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?
(7) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?
(8) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 10% simple interest?
(9) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(10) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.