Question:
What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
Correct Answer
$3355
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 5%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3050 × 5% × 2
= $3050 ×5/100 × 2
= 3050 × 5 × 2/100
= 15250 × 2/100
= 30500/100
= $305
Thus, Simple Interest = $305
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 = $3050 + $305
= $3355
Thus, Amount to be paid = $3355 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 = $3050
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 5% × 2)
= $3050 + ($3050 ×5/100 × 2)
= $3050 + (3050 × 5 × 2/100)
= $3050 + (15250 × 2/100)
= $3050 + (30500/100)
= $3050 + $305 = $3355
Thus, Amount (A) to be paid = $3355 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3050, the simple interest in 1 year
= 5/100 × 3050
= 5 × 3050/100
= 15250/100 = $152.5
Thus, simple interest for 1 year = $152.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $152.5 × 2 = $305
Thus, Simple Interest (SI) = $305
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $305
= $3355
Thus, Amount to be paid = $3355 Answer
Similar Questions
(1) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?
(5) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(6) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(7) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 4 years.
(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.