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 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(2) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(4) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?
(6) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(7) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(9) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?
(10) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.