Question:
What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
Correct Answer
$4661
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 9% × 2
= $3950 ×9/100 × 2
= 3950 × 9 × 2/100
= 35550 × 2/100
= 71100/100
= $711
Thus, Simple Interest = $711
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 = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 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 = $3950
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 9% × 2)
= $3950 + ($3950 ×9/100 × 2)
= $3950 + (3950 × 9 × 2/100)
= $3950 + (35550 × 2/100)
= $3950 + (71100/100)
= $3950 + $711 = $4661
Thus, Amount (A) to be paid = $4661 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 $3950, the simple interest in 1 year
= 9/100 × 3950
= 9 × 3950/100
= 35550/100 = $355.5
Thus, simple interest for 1 year = $355.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $355.5 × 2 = $711
Thus, Simple Interest (SI) = $711
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
(3) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 7 years.
(5) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(6) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 7% simple interest?
(8) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(9) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 7 years.