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) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(2) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(4) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10679 to clear the loan, then find the time period of the loan.
(5) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(6) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?
(7) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 7 years.
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(9) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9231 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 8 years.