Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
Correct Answer
$3795
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 5% × 2
= $3450 ×5/100 × 2
= 3450 × 5 × 2/100
= 17250 × 2/100
= 34500/100
= $345
Thus, Simple Interest = $345
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 = $3450 + $345
= $3795
Thus, Amount to be paid = $3795 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 = $3450
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 5% × 2)
= $3450 + ($3450 ×5/100 × 2)
= $3450 + (3450 × 5 × 2/100)
= $3450 + (17250 × 2/100)
= $3450 + (34500/100)
= $3450 + $345 = $3795
Thus, Amount (A) to be paid = $3795 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 $3450, the simple interest in 1 year
= 5/100 × 3450
= 5 × 3450/100
= 17250/100 = $172.5
Thus, simple interest for 1 year = $172.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $172.5 × 2 = $345
Thus, Simple Interest (SI) = $345
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $345
= $3795
Thus, Amount to be paid = $3795 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(2) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(3) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.
(4) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
(6) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 3 years.
(8) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(9) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.