Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
Correct Answer
$4080
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 10% × 2
= $3400 ×10/100 × 2
= 3400 × 10 × 2/100
= 34000 × 2/100
= 68000/100
= $680
Thus, Simple Interest = $680
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 = $3400 + $680
= $4080
Thus, Amount to be paid = $4080 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 = $3400
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 10% × 2)
= $3400 + ($3400 ×10/100 × 2)
= $3400 + (3400 × 10 × 2/100)
= $3400 + (34000 × 2/100)
= $3400 + (68000/100)
= $3400 + $680 = $4080
Thus, Amount (A) to be paid = $4080 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 $3400, the simple interest in 1 year
= 10/100 × 3400
= 10 × 3400/100
= 34000/100 = $340
Thus, simple interest for 1 year = $340
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $340 × 2 = $680
Thus, Simple Interest (SI) = $680
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $680
= $4080
Thus, Amount to be paid = $4080 Answer
Similar Questions
(1) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(2) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(3) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(5) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(6) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(7) If Margaret paid $5046 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.
(9) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.
(10) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.