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) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
(3) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(5) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 5% simple interest?
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(8) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?
(9) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 9% simple interest?