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) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?
(2) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(3) 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.
(4) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(6) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(8) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(9) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?