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) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.
(2) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(3) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 8 years.
(6) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 8 years.