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) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(2) If Donna paid $5626 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Betty had to pay $4632.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(6) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(7) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?
(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(9) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.