Question:
What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
Correct Answer
$3648
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 7% × 2
= $3200 ×7/100 × 2
= 3200 × 7 × 2/100
= 22400 × 2/100
= 44800/100
= $448
Thus, Simple Interest = $448
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 = $3200 + $448
= $3648
Thus, Amount to be paid = $3648 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 = $3200
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3200 + ($3200 × 7% × 2)
= $3200 + ($3200 ×7/100 × 2)
= $3200 + (3200 × 7 × 2/100)
= $3200 + (22400 × 2/100)
= $3200 + (44800/100)
= $3200 + $448 = $3648
Thus, Amount (A) to be paid = $3648 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 $3200, the simple interest in 1 year
= 7/100 × 3200
= 7 × 3200/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $224 × 2 = $448
Thus, Simple Interest (SI) = $448
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $448
= $3648
Thus, Amount to be paid = $3648 Answer
Similar Questions
(1) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(2) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 4 years.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?
(6) If William paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(9) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.