Question:
What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
Correct Answer
$3410
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 5% × 2
= $3100 ×5/100 × 2
= 3100 × 5 × 2/100
= 15500 × 2/100
= 31000/100
= $310
Thus, Simple Interest = $310
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 = $3100 + $310
= $3410
Thus, Amount to be paid = $3410 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 = $3100
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 5% × 2)
= $3100 + ($3100 ×5/100 × 2)
= $3100 + (3100 × 5 × 2/100)
= $3100 + (15500 × 2/100)
= $3100 + (31000/100)
= $3100 + $310 = $3410
Thus, Amount (A) to be paid = $3410 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 $3100, the simple interest in 1 year
= 5/100 × 3100
= 5 × 3100/100
= 15500/100 = $155
Thus, simple interest for 1 year = $155
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $155 × 2 = $310
Thus, Simple Interest (SI) = $310
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $310
= $3410
Thus, Amount to be paid = $3410 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(2) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(3) Joshua had to pay $5488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 2% simple interest?
(5) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(6) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 8 years.
(8) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.