Question:
What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
Correct Answer
$4320
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 10% × 2
= $3600 ×10/100 × 2
= 3600 × 10 × 2/100
= 36000 × 2/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 = $3600 + $720
= $4320
Thus, Amount to be paid = $4320 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 = $3600
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3600 + ($3600 × 10% × 2)
= $3600 + ($3600 ×10/100 × 2)
= $3600 + (3600 × 10 × 2/100)
= $3600 + (36000 × 2/100)
= $3600 + (72000/100)
= $3600 + $720 = $4320
Thus, Amount (A) to be paid = $4320 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 $3600, the simple interest in 1 year
= 10/100 × 3600
= 10 × 3600/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $360 × 2 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $720
= $4320
Thus, Amount to be paid = $4320 Answer
Similar Questions
(1) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 5% simple interest?
(2) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 8% simple interest?
(3) Emily had to pay $5462.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 3 years.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(7) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(9) Karen had to pay $4424 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.