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) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(2) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.
(7) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(9) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.
(10) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?