Question:
What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?
Correct Answer
$3465
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 5% × 2
= $3150 ×5/100 × 2
= 3150 × 5 × 2/100
= 15750 × 2/100
= 31500/100
= $315
Thus, Simple Interest = $315
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 = $3150 + $315
= $3465
Thus, Amount to be paid = $3465 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 = $3150
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3150 + ($3150 × 5% × 2)
= $3150 + ($3150 ×5/100 × 2)
= $3150 + (3150 × 5 × 2/100)
= $3150 + (15750 × 2/100)
= $3150 + (31500/100)
= $3150 + $315 = $3465
Thus, Amount (A) to be paid = $3465 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 $3150, the simple interest in 1 year
= 5/100 × 3150
= 5 × 3150/100
= 15750/100 = $157.5
Thus, simple interest for 1 year = $157.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $157.5 × 2 = $315
Thus, Simple Interest (SI) = $315
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $315
= $3465
Thus, Amount to be paid = $3465 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(2) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 3 years.
(4) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(6) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(10) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.