Question:
What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 10% simple interest?
Correct Answer
$4680
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 10% × 2
= $3900 ×10/100 × 2
= 3900 × 10 × 2/100
= 39000 × 2/100
= 78000/100
= $780
Thus, Simple Interest = $780
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 = $3900 + $780
= $4680
Thus, Amount to be paid = $4680 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 = $3900
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 10% × 2)
= $3900 + ($3900 ×10/100 × 2)
= $3900 + (3900 × 10 × 2/100)
= $3900 + (39000 × 2/100)
= $3900 + (78000/100)
= $3900 + $780 = $4680
Thus, Amount (A) to be paid = $4680 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 $3900, the simple interest in 1 year
= 10/100 × 3900
= 10 × 3900/100
= 39000/100 = $390
Thus, simple interest for 1 year = $390
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $390 × 2 = $780
Thus, Simple Interest (SI) = $780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $780
= $4680
Thus, Amount to be paid = $4680 Answer
Similar Questions
(1) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(3) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(4) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(5) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 2% simple interest?
(7) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(9) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(10) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?