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) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.
(2) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(3) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(4) Robert had to pay $3565 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
(10) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.