Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?
Correct Answer
$4380
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 10% × 2
= $3650 ×10/100 × 2
= 3650 × 10 × 2/100
= 36500 × 2/100
= 73000/100
= $730
Thus, Simple Interest = $730
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 = $3650 + $730
= $4380
Thus, Amount to be paid = $4380 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 = $3650
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 10% × 2)
= $3650 + ($3650 ×10/100 × 2)
= $3650 + (3650 × 10 × 2/100)
= $3650 + (36500 × 2/100)
= $3650 + (73000/100)
= $3650 + $730 = $4380
Thus, Amount (A) to be paid = $4380 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 $3650, the simple interest in 1 year
= 10/100 × 3650
= 10 × 3650/100
= 36500/100 = $365
Thus, simple interest for 1 year = $365
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $365 × 2 = $730
Thus, Simple Interest (SI) = $730
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $730
= $4380
Thus, Amount to be paid = $4380 Answer
Similar Questions
(1) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?
(2) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8493 to clear the loan, then find the time period of the loan.
(5) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(7) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(8) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.