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) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(2) If Lisa paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?
(4) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(6) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 4 years.
(7) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(8) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?
(10) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.