Question:
What amount will be due after 2 years if James borrowed a sum of $3000 at a 7% simple interest?
Correct Answer
$3420
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 7%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3000 × 7% × 2
= $3000 ×7/100 × 2
= 3000 × 7 × 2/100
= 21000 × 2/100
= 42000/100
= $420
Thus, Simple Interest = $420
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 = $3000 + $420
= $3420
Thus, Amount to be paid = $3420 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 = $3000
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 7% × 2)
= $3000 + ($3000 ×7/100 × 2)
= $3000 + (3000 × 7 × 2/100)
= $3000 + (21000 × 2/100)
= $3000 + (42000/100)
= $3000 + $420 = $3420
Thus, Amount (A) to be paid = $3420 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3000, the simple interest in 1 year
= 7/100 × 3000
= 7 × 3000/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $210 × 2 = $420
Thus, Simple Interest (SI) = $420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $420
= $3420
Thus, Amount to be paid = $3420 Answer
Similar Questions
(1) If Sandra paid $4806 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 6% simple interest?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 7 years.
(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(8) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(9) If Thomas paid $4104 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 7 years.