Question:
What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
Correct Answer
$3630
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 5% × 2
= $3300 ×5/100 × 2
= 3300 × 5 × 2/100
= 16500 × 2/100
= 33000/100
= $330
Thus, Simple Interest = $330
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 = $3300 + $330
= $3630
Thus, Amount to be paid = $3630 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 = $3300
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 5% × 2)
= $3300 + ($3300 ×5/100 × 2)
= $3300 + (3300 × 5 × 2/100)
= $3300 + (16500 × 2/100)
= $3300 + (33000/100)
= $3300 + $330 = $3630
Thus, Amount (A) to be paid = $3630 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 $3300, the simple interest in 1 year
= 5/100 × 3300
= 5 × 3300/100
= 16500/100 = $165
Thus, simple interest for 1 year = $165
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $165 × 2 = $330
Thus, Simple Interest (SI) = $330
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $330
= $3630
Thus, Amount to be paid = $3630 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 4% simple interest?
(2) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(4) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(6) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 3 years.
(8) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 3 years.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(10) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.