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) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 7 years.
(2) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(3) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(7) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(9) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.