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) How much loan did Ryan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9085 to clear it?
(2) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(4) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.
(6) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(8) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(10) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.