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) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
(3) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(5) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(6) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 9% simple interest?
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 7 years.
(8) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.