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) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 7 years.
(2) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(5) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(6) How much loan did Donald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7800 to clear it?
(7) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(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) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.