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) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 5% simple interest?
(5) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(6) 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.
(7) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(10) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10281 to clear the loan, then find the time period of the loan.