Question:
What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
Correct Answer
$3780
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 10% × 2
= $3150 ×10/100 × 2
= 3150 × 10 × 2/100
= 31500 × 2/100
= 63000/100
= $630
Thus, Simple Interest = $630
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 = $3150 + $630
= $3780
Thus, Amount to be paid = $3780 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 = $3150
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3150 + ($3150 × 10% × 2)
= $3150 + ($3150 ×10/100 × 2)
= $3150 + (3150 × 10 × 2/100)
= $3150 + (31500 × 2/100)
= $3150 + (63000/100)
= $3150 + $630 = $3780
Thus, Amount (A) to be paid = $3780 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 $3150, the simple interest in 1 year
= 10/100 × 3150
= 10 × 3150/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $315 × 2 = $630
Thus, Simple Interest (SI) = $630
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $630
= $3780
Thus, Amount to be paid = $3780 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?
(2) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
(5) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(6) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 9% simple interest.
(9) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.