Question:
What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
Correct Answer
$3720
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 10%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3100 × 10% × 2
= $3100 ×10/100 × 2
= 3100 × 10 × 2/100
= 31000 × 2/100
= 62000/100
= $620
Thus, Simple Interest = $620
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 = $3100 + $620
= $3720
Thus, Amount to be paid = $3720 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 = $3100
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 10% × 2)
= $3100 + ($3100 ×10/100 × 2)
= $3100 + (3100 × 10 × 2/100)
= $3100 + (31000 × 2/100)
= $3100 + (62000/100)
= $3100 + $620 = $3720
Thus, Amount (A) to be paid = $3720 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3100, the simple interest in 1 year
= 10/100 × 3100
= 10 × 3100/100
= 31000/100 = $310
Thus, simple interest for 1 year = $310
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $310 × 2 = $620
Thus, Simple Interest (SI) = $620
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $620
= $3720
Thus, Amount to be paid = $3720 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 7 years.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.
(4) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(5) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 10% simple interest?
(6) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(7) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(10) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.