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) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?
(3) 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.
(4) How much loan did Sandra borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7417.5 to clear it?
(5) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(7) How much loan did Betty borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7812.5 to clear it?
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 7 years.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 8 years.
(10) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.