Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
Correct Answer
$4140
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 10% × 2
= $3450 ×10/100 × 2
= 3450 × 10 × 2/100
= 34500 × 2/100
= 69000/100
= $690
Thus, Simple Interest = $690
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 = $3450 + $690
= $4140
Thus, Amount to be paid = $4140 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 = $3450
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 10% × 2)
= $3450 + ($3450 ×10/100 × 2)
= $3450 + (3450 × 10 × 2/100)
= $3450 + (34500 × 2/100)
= $3450 + (69000/100)
= $3450 + $690 = $4140
Thus, Amount (A) to be paid = $4140 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 $3450, the simple interest in 1 year
= 10/100 × 3450
= 10 × 3450/100
= 34500/100 = $345
Thus, simple interest for 1 year = $345
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $345 × 2 = $690
Thus, Simple Interest (SI) = $690
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $690
= $4140
Thus, Amount to be paid = $4140 Answer
Similar Questions
(1) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?
(2) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 7% simple interest?
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
(6) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 7 years.
(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
(10) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?