Question:
What amount will be due after 2 years if David borrowed a sum of $3200 at a 10% simple interest?
Correct Answer
$3840
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 10% × 2
= $3200 ×10/100 × 2
= 3200 × 10 × 2/100
= 32000 × 2/100
= 64000/100
= $640
Thus, Simple Interest = $640
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 = $3200 + $640
= $3840
Thus, Amount to be paid = $3840 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 = $3200
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 2)
= $3200 + ($3200 ×10/100 × 2)
= $3200 + (3200 × 10 × 2/100)
= $3200 + (32000 × 2/100)
= $3200 + (64000/100)
= $3200 + $640 = $3840
Thus, Amount (A) to be paid = $3840 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 $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $320 × 2 = $640
Thus, Simple Interest (SI) = $640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $640
= $3840
Thus, Amount to be paid = $3840 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 7% simple interest?
(2) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 2% simple interest?
(4) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(5) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(7) In how much time a principal of $3000 will amount to $3450 at a simple interest of 5% per annum?
(8) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8682.5 to clear it?
(9) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(10) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.