Question:
What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
Correct Answer
$4740
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 10% × 2
= $3950 ×10/100 × 2
= 3950 × 10 × 2/100
= 39500 × 2/100
= 79000/100
= $790
Thus, Simple Interest = $790
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 = $3950 + $790
= $4740
Thus, Amount to be paid = $4740 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 = $3950
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 10% × 2)
= $3950 + ($3950 ×10/100 × 2)
= $3950 + (3950 × 10 × 2/100)
= $3950 + (39500 × 2/100)
= $3950 + (79000/100)
= $3950 + $790 = $4740
Thus, Amount (A) to be paid = $4740 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 $3950, the simple interest in 1 year
= 10/100 × 3950
= 10 × 3950/100
= 39500/100 = $395
Thus, simple interest for 1 year = $395
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $395 × 2 = $790
Thus, Simple Interest (SI) = $790
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $790
= $4740
Thus, Amount to be paid = $4740 Answer
Similar Questions
(1) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(2) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(4) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(5) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(8) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(9) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?