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) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(2) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(3) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 9% simple interest?
(6) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(7) Richard had to pay $4032 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(9) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(10) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.