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) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
(2) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(4) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(6) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(7) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?
(9) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 6% simple interest?