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 6% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(2) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?
(3) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.
(4) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(5) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(6) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(7) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
(9) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.
(10) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.