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 Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(4) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 4 years.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.
(7) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 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 $7200 to clear the loan, then find the time period of the loan.
(9) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.
(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?