Question:
What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?
Correct Answer
$4800
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 10% × 2
= $4000 ×10/100 × 2
= 4000 × 10 × 2/100
= 40000 × 2/100
= 80000/100
= $800
Thus, Simple Interest = $800
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 = $4000 + $800
= $4800
Thus, Amount to be paid = $4800 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 = $4000
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $4000 + ($4000 × 10% × 2)
= $4000 + ($4000 ×10/100 × 2)
= $4000 + (4000 × 10 × 2/100)
= $4000 + (40000 × 2/100)
= $4000 + (80000/100)
= $4000 + $800 = $4800
Thus, Amount (A) to be paid = $4800 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 $4000, the simple interest in 1 year
= 10/100 × 4000
= 10 × 4000/100
= 40000/100 = $400
Thus, simple interest for 1 year = $400
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $400 × 2 = $800
Thus, Simple Interest (SI) = $800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $800
= $4800
Thus, Amount to be paid = $4800 Answer
Similar Questions
(1) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(3) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(4) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(6) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(7) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 4% simple interest?
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.
(10) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.