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 if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
(3) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(4) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(5) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?
(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?
(7) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(8) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 7 years.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 3 years.