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 Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(2) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 8 years.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 7 years.
(5) How much loan did Paul borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8375 to clear it?
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 4% simple interest?
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.
(9) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(10) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?