Question:
What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
Correct Answer
$4543
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 9% × 2
= $3850 ×9/100 × 2
= 3850 × 9 × 2/100
= 34650 × 2/100
= 69300/100
= $693
Thus, Simple Interest = $693
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 = $3850 + $693
= $4543
Thus, Amount to be paid = $4543 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 = $3850
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3850 + ($3850 × 9% × 2)
= $3850 + ($3850 ×9/100 × 2)
= $3850 + (3850 × 9 × 2/100)
= $3850 + (34650 × 2/100)
= $3850 + (69300/100)
= $3850 + $693 = $4543
Thus, Amount (A) to be paid = $4543 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 $3850, the simple interest in 1 year
= 9/100 × 3850
= 9 × 3850/100
= 34650/100 = $346.5
Thus, simple interest for 1 year = $346.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $346.5 × 2 = $693
Thus, Simple Interest (SI) = $693
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $693
= $4543
Thus, Amount to be paid = $4543 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(2) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 4 years.
(5) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
(6) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.
(8) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.
(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.