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) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(3) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 3 years.
(5) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(6) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(9) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(10) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.