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) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(4) How much loan did Joseph borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7125 to clear it?
(5) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?
(6) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 7% simple interest?
(7) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(10) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.