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) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(3) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(5) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.
(7) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
(8) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(10) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.