Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
Correct Answer
$4440
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 10% × 2
= $3700 ×10/100 × 2
= 3700 × 10 × 2/100
= 37000 × 2/100
= 74000/100
= $740
Thus, Simple Interest = $740
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 = $3700 + $740
= $4440
Thus, Amount to be paid = $4440 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 = $3700
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 10% × 2)
= $3700 + ($3700 ×10/100 × 2)
= $3700 + (3700 × 10 × 2/100)
= $3700 + (37000 × 2/100)
= $3700 + (74000/100)
= $3700 + $740 = $4440
Thus, Amount (A) to be paid = $4440 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 $3700, the simple interest in 1 year
= 10/100 × 3700
= 10 × 3700/100
= 37000/100 = $370
Thus, simple interest for 1 year = $370
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $370 × 2 = $740
Thus, Simple Interest (SI) = $740
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $740
= $4440
Thus, Amount to be paid = $4440 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(2) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
(3) Charles had to pay $4485 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 after 9 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(5) What amount will be due after 2 years if James borrowed a sum of $3000 at a 7% simple interest?
(6) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?
(8) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(10) If Linda paid $4020 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.