Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?
Correct Answer
$4200
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 10% × 2
= $3500 ×10/100 × 2
= 3500 × 10 × 2/100
= 35000 × 2/100
= 70000/100
= $700
Thus, Simple Interest = $700
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 = $3500 + $700
= $4200
Thus, Amount to be paid = $4200 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 = $3500
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 10% × 2)
= $3500 + ($3500 ×10/100 × 2)
= $3500 + (3500 × 10 × 2/100)
= $3500 + (35000 × 2/100)
= $3500 + (70000/100)
= $3500 + $700 = $4200
Thus, Amount (A) to be paid = $4200 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 $3500, the simple interest in 1 year
= 10/100 × 3500
= 10 × 3500/100
= 35000/100 = $350
Thus, simple interest for 1 year = $350
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $350 × 2 = $700
Thus, Simple Interest (SI) = $700
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $700
= $4200
Thus, Amount to be paid = $4200 Answer
Similar Questions
(1) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 7% simple interest?
(2) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(3) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(4) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7980 to clear it?
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 8 years.
(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 8% simple interest?
(7) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(8) What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?
(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(10) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.