Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?
Correct Answer
$4560
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 10% × 2
= $3800 ×10/100 × 2
= 3800 × 10 × 2/100
= 38000 × 2/100
= 76000/100
= $760
Thus, Simple Interest = $760
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 = $3800 + $760
= $4560
Thus, Amount to be paid = $4560 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 = $3800
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 10% × 2)
= $3800 + ($3800 ×10/100 × 2)
= $3800 + (3800 × 10 × 2/100)
= $3800 + (38000 × 2/100)
= $3800 + (76000/100)
= $3800 + $760 = $4560
Thus, Amount (A) to be paid = $4560 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 $3800, the simple interest in 1 year
= 10/100 × 3800
= 10 × 3800/100
= 38000/100 = $380
Thus, simple interest for 1 year = $380
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $380 × 2 = $760
Thus, Simple Interest (SI) = $760
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $760
= $4560
Thus, Amount to be paid = $4560 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(2) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 9% simple interest?
(4) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
(6) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(7) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(8) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(9) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9086 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.