Question:
What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?
Correct Answer
$3705
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 7% × 2
= $3250 ×7/100 × 2
= 3250 × 7 × 2/100
= 22750 × 2/100
= 45500/100
= $455
Thus, Simple Interest = $455
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 = $3250 + $455
= $3705
Thus, Amount to be paid = $3705 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 = $3250
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 2)
= $3250 + ($3250 ×7/100 × 2)
= $3250 + (3250 × 7 × 2/100)
= $3250 + (22750 × 2/100)
= $3250 + (45500/100)
= $3250 + $455 = $3705
Thus, Amount (A) to be paid = $3705 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 $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $227.5 × 2 = $455
Thus, Simple Interest (SI) = $455
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $455
= $3705
Thus, Amount to be paid = $3705 Answer
Similar Questions
(1) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
(2) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.
(3) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.
(6) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(9) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?