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 Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(2) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(4) If Jessica paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(7) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 8 years.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.