Question:
What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 5% simple interest?
Correct Answer
$3685
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 5% × 2
= $3350 ×5/100 × 2
= 3350 × 5 × 2/100
= 16750 × 2/100
= 33500/100
= $335
Thus, Simple Interest = $335
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 = $3350 + $335
= $3685
Thus, Amount to be paid = $3685 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 = $3350
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 5% × 2)
= $3350 + ($3350 ×5/100 × 2)
= $3350 + (3350 × 5 × 2/100)
= $3350 + (16750 × 2/100)
= $3350 + (33500/100)
= $3350 + $335 = $3685
Thus, Amount (A) to be paid = $3685 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 $3350, the simple interest in 1 year
= 5/100 × 3350
= 5 × 3350/100
= 16750/100 = $167.5
Thus, simple interest for 1 year = $167.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $167.5 × 2 = $335
Thus, Simple Interest (SI) = $335
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $335
= $3685
Thus, Amount to be paid = $3685 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7980 to clear the loan, then find the time period of the loan.
(2) 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.
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.
(4) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(5) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 5% simple interest?
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 5% simple interest?
(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 4 years.
(9) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.