Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
Correct Answer
$3905
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 5% × 2
= $3550 ×5/100 × 2
= 3550 × 5 × 2/100
= 17750 × 2/100
= 35500/100
= $355
Thus, Simple Interest = $355
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 = $3550 + $355
= $3905
Thus, Amount to be paid = $3905 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 = $3550
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 5% × 2)
= $3550 + ($3550 ×5/100 × 2)
= $3550 + (3550 × 5 × 2/100)
= $3550 + (17750 × 2/100)
= $3550 + (35500/100)
= $3550 + $355 = $3905
Thus, Amount (A) to be paid = $3905 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 $3550, the simple interest in 1 year
= 5/100 × 3550
= 5 × 3550/100
= 17750/100 = $177.5
Thus, simple interest for 1 year = $177.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $177.5 × 2 = $355
Thus, Simple Interest (SI) = $355
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $355
= $3905
Thus, Amount to be paid = $3905 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(2) If Kenneth paid $5800 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Kenneth had to pay $5750 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.
(7) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(10) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.