Question:
What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 7% simple interest?
Correct Answer
$3762
Solution And Explanation
Solution
Given,
Principal (P) = $3300
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) = $3300 × 7% × 2
= $3300 ×7/100 × 2
= 3300 × 7 × 2/100
= 23100 × 2/100
= 46200/100
= $462
Thus, Simple Interest = $462
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 = $3300 + $462
= $3762
Thus, Amount to be paid = $3762 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 = $3300
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3300 + ($3300 × 7% × 2)
= $3300 + ($3300 ×7/100 × 2)
= $3300 + (3300 × 7 × 2/100)
= $3300 + (23100 × 2/100)
= $3300 + (46200/100)
= $3300 + $462 = $3762
Thus, Amount (A) to be paid = $3762 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 $3300, the simple interest in 1 year
= 7/100 × 3300
= 7 × 3300/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $231 × 2 = $462
Thus, Simple Interest (SI) = $462
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $462
= $3762
Thus, Amount to be paid = $3762 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.
(2) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(3) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(6) If David paid $3672 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.