Question:
What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
Correct Answer
$3534
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 7% × 2
= $3100 ×7/100 × 2
= 3100 × 7 × 2/100
= 21700 × 2/100
= 43400/100
= $434
Thus, Simple Interest = $434
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 = $3100 + $434
= $3534
Thus, Amount to be paid = $3534 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 = $3100
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3100 + ($3100 × 7% × 2)
= $3100 + ($3100 ×7/100 × 2)
= $3100 + (3100 × 7 × 2/100)
= $3100 + (21700 × 2/100)
= $3100 + (43400/100)
= $3100 + $434 = $3534
Thus, Amount (A) to be paid = $3534 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 $3100, the simple interest in 1 year
= 7/100 × 3100
= 7 × 3100/100
= 21700/100 = $217
Thus, simple interest for 1 year = $217
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $217 × 2 = $434
Thus, Simple Interest (SI) = $434
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $434
= $3534
Thus, Amount to be paid = $3534 Answer
Similar Questions
(1) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?
(2) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(4) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(5) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(8) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?
(9) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?