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) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(2) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(5) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?
(7) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(8) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
(9) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.