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 if David borrowed a sum of $3400 at 2% simple interest for 3 years.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 8 years.
(3) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(5) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(6) Nancy had to pay $4772.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(9) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(10) If Richard paid $4176 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.