Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 10% simple interest?
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 10% × 2
= $3250 ×10/100 × 2
= 3250 × 10 × 2/100
= 32500 × 2/100
= 65000/100
= $650
Thus, Simple Interest = $650
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 = $3250 + $650
= $3900
Thus, Amount to be paid = $3900 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 = $3250
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 10% × 2)
= $3250 + ($3250 ×10/100 × 2)
= $3250 + (3250 × 10 × 2/100)
= $3250 + (32500 × 2/100)
= $3250 + (65000/100)
= $3250 + $650 = $3900
Thus, Amount (A) to be paid = $3900 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 $3250, the simple interest in 1 year
= 10/100 × 3250
= 10 × 3250/100
= 32500/100 = $325
Thus, simple interest for 1 year = $325
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $325 × 2 = $650
Thus, Simple Interest (SI) = $650
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $650
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(2) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6120 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(4) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(6) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(7) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(8) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(9) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?
(10) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.