Question:
What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?
Correct Answer
$3850
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 5% × 2
= $3500 ×5/100 × 2
= 3500 × 5 × 2/100
= 17500 × 2/100
= 35000/100
= $350
Thus, Simple Interest = $350
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 = $3500 + $350
= $3850
Thus, Amount to be paid = $3850 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 = $3500
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3500 + ($3500 × 5% × 2)
= $3500 + ($3500 ×5/100 × 2)
= $3500 + (3500 × 5 × 2/100)
= $3500 + (17500 × 2/100)
= $3500 + (35000/100)
= $3500 + $350 = $3850
Thus, Amount (A) to be paid = $3850 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 $3500, the simple interest in 1 year
= 5/100 × 3500
= 5 × 3500/100
= 17500/100 = $175
Thus, simple interest for 1 year = $175
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $175 × 2 = $350
Thus, Simple Interest (SI) = $350
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $350
= $3850
Thus, Amount to be paid = $3850 Answer
Similar Questions
(1) Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(3) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(5) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(7) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(8) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(9) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.