Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
Correct Answer
$4484
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 9% × 2
= $3800 ×9/100 × 2
= 3800 × 9 × 2/100
= 34200 × 2/100
= 68400/100
= $684
Thus, Simple Interest = $684
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 = $3800 + $684
= $4484
Thus, Amount to be paid = $4484 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 = $3800
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 9% × 2)
= $3800 + ($3800 ×9/100 × 2)
= $3800 + (3800 × 9 × 2/100)
= $3800 + (34200 × 2/100)
= $3800 + (68400/100)
= $3800 + $684 = $4484
Thus, Amount (A) to be paid = $4484 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 $3800, the simple interest in 1 year
= 9/100 × 3800
= 9 × 3800/100
= 34200/100 = $342
Thus, simple interest for 1 year = $342
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $342 × 2 = $684
Thus, Simple Interest (SI) = $684
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $684
= $4484
Thus, Amount to be paid = $4484 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(2) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(3) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(6) How much loan did Michael borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6095 to clear it?
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(9) David had to pay $3604 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.