Question:
What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 10% simple interest?
Correct Answer
$4500
Solution And Explanation
Solution
Given,
Principal (P) = $3750
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) = $3750 × 10% × 2
= $3750 ×10/100 × 2
= 3750 × 10 × 2/100
= 37500 × 2/100
= 75000/100
= $750
Thus, Simple Interest = $750
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 = $3750 + $750
= $4500
Thus, Amount to be paid = $4500 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 = $3750
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 10% × 2)
= $3750 + ($3750 ×10/100 × 2)
= $3750 + (3750 × 10 × 2/100)
= $3750 + (37500 × 2/100)
= $3750 + (75000/100)
= $3750 + $750 = $4500
Thus, Amount (A) to be paid = $4500 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 $3750, the simple interest in 1 year
= 10/100 × 3750
= 10 × 3750/100
= 37500/100 = $375
Thus, simple interest for 1 year = $375
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $375 × 2 = $750
Thus, Simple Interest (SI) = $750
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $750
= $4500
Thus, Amount to be paid = $4500 Answer
Similar Questions
(1) In how much time a principal of $3100 will amount to $3565 at a simple interest of 3% per annum?
(2) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(3) How much loan did Carol borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8812.5 to clear it?
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 8 years.
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(6) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(7) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
(8) If Sandra paid $5162 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Paul had to pay $5405 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.