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) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(2) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(3) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(4) How much loan did Emily borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8100 to clear it?
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(7) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.
(9) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.
(10) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 6% simple interest?