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) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 3 years.
(3) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(4) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(5) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(6) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(8) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 4 years.
(10) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.