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) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.
(4) How much loan did Anthony borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7245 to clear it?
(5) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(7) If Mary paid $3416 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.
(10) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7544 to clear the loan, then find the time period of the loan.