Question:
What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?
Correct Answer
$4620
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 10% × 2
= $3850 ×10/100 × 2
= 3850 × 10 × 2/100
= 38500 × 2/100
= 77000/100
= $770
Thus, Simple Interest = $770
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 = $3850 + $770
= $4620
Thus, Amount to be paid = $4620 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 = $3850
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3850 + ($3850 × 10% × 2)
= $3850 + ($3850 ×10/100 × 2)
= $3850 + (3850 × 10 × 2/100)
= $3850 + (38500 × 2/100)
= $3850 + (77000/100)
= $3850 + $770 = $4620
Thus, Amount (A) to be paid = $4620 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 $3850, the simple interest in 1 year
= 10/100 × 3850
= 10 × 3850/100
= 38500/100 = $385
Thus, simple interest for 1 year = $385
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $385 × 2 = $770
Thus, Simple Interest (SI) = $770
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $770
= $4620
Thus, Amount to be paid = $4620 Answer
Similar Questions
(1) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
(2) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(3) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.
(6) William had to pay $3815 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.
(8) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 8 years.