Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
Correct Answer
$4070
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 5% × 2
= $3700 ×5/100 × 2
= 3700 × 5 × 2/100
= 18500 × 2/100
= 37000/100
= $370
Thus, Simple Interest = $370
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 = $3700 + $370
= $4070
Thus, Amount to be paid = $4070 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 = $3700
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 5% × 2)
= $3700 + ($3700 ×5/100 × 2)
= $3700 + (3700 × 5 × 2/100)
= $3700 + (18500 × 2/100)
= $3700 + (37000/100)
= $3700 + $370 = $4070
Thus, Amount (A) to be paid = $4070 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 $3700, the simple interest in 1 year
= 5/100 × 3700
= 5 × 3700/100
= 18500/100 = $185
Thus, simple interest for 1 year = $185
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $185 × 2 = $370
Thus, Simple Interest (SI) = $370
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $370
= $4070
Thus, Amount to be paid = $4070 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?
(2) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(4) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(6) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(7) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(8) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(10) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.