Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 5% simple interest?
Correct Answer
$3575
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 5% × 2
= $3250 ×5/100 × 2
= 3250 × 5 × 2/100
= 16250 × 2/100
= 32500/100
= $325
Thus, Simple Interest = $325
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 = $3250 + $325
= $3575
Thus, Amount to be paid = $3575 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 = $3250
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 5% × 2)
= $3250 + ($3250 ×5/100 × 2)
= $3250 + (3250 × 5 × 2/100)
= $3250 + (16250 × 2/100)
= $3250 + (32500/100)
= $3250 + $325 = $3575
Thus, Amount (A) to be paid = $3575 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 $3250, the simple interest in 1 year
= 5/100 × 3250
= 5 × 3250/100
= 16250/100 = $162.5
Thus, simple interest for 1 year = $162.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $162.5 × 2 = $325
Thus, Simple Interest (SI) = $325
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $325
= $3575
Thus, Amount to be paid = $3575 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(2) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(3) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(4) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(6) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(7) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(8) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?
(10) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.