Question:
What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 7% simple interest?
Correct Answer
$3477
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 7% × 2
= $3050 ×7/100 × 2
= 3050 × 7 × 2/100
= 21350 × 2/100
= 42700/100
= $427
Thus, Simple Interest = $427
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 = $3050 + $427
= $3477
Thus, Amount to be paid = $3477 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 = $3050
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3050 + ($3050 × 7% × 2)
= $3050 + ($3050 ×7/100 × 2)
= $3050 + (3050 × 7 × 2/100)
= $3050 + (21350 × 2/100)
= $3050 + (42700/100)
= $3050 + $427 = $3477
Thus, Amount (A) to be paid = $3477 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 $3050, the simple interest in 1 year
= 7/100 × 3050
= 7 × 3050/100
= 21350/100 = $213.5
Thus, simple interest for 1 year = $213.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $213.5 × 2 = $427
Thus, Simple Interest (SI) = $427
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $427
= $3477
Thus, Amount to be paid = $3477 Answer
Similar Questions
(1) How much loan did Michelle borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8687.5 to clear it?
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 5% simple interest?
(3) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?
(5) If Patricia paid $3528 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(7) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 9% simple interest?
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(10) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?