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) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?
(4) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?
(6) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(8) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.
(10) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.