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) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(2) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.
(4) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(7) How much loan did Linda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6420 to clear it?
(8) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(9) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.