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) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?
(2) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.
(4) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(7) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(10) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.