Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 5% simple interest?
Correct Answer
$3740
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 5% × 2
= $3400 ×5/100 × 2
= 3400 × 5 × 2/100
= 17000 × 2/100
= 34000/100
= $340
Thus, Simple Interest = $340
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 = $3400 + $340
= $3740
Thus, Amount to be paid = $3740 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 = $3400
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 5% × 2)
= $3400 + ($3400 ×5/100 × 2)
= $3400 + (3400 × 5 × 2/100)
= $3400 + (17000 × 2/100)
= $3400 + (34000/100)
= $3400 + $340 = $3740
Thus, Amount (A) to be paid = $3740 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 $3400, the simple interest in 1 year
= 5/100 × 3400
= 5 × 3400/100
= 17000/100 = $170
Thus, simple interest for 1 year = $170
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $170 × 2 = $340
Thus, Simple Interest (SI) = $340
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $340
= $3740
Thus, Amount to be paid = $3740 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(3) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(4) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?
(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?
(6) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(8) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(9) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?