Question:
What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 7% simple interest?
Correct Answer
$3819
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 7% × 2
= $3350 ×7/100 × 2
= 3350 × 7 × 2/100
= 23450 × 2/100
= 46900/100
= $469
Thus, Simple Interest = $469
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 = $3350 + $469
= $3819
Thus, Amount to be paid = $3819 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 = $3350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3350 + ($3350 × 7% × 2)
= $3350 + ($3350 ×7/100 × 2)
= $3350 + (3350 × 7 × 2/100)
= $3350 + (23450 × 2/100)
= $3350 + (46900/100)
= $3350 + $469 = $3819
Thus, Amount (A) to be paid = $3819 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 $3350, the simple interest in 1 year
= 7/100 × 3350
= 7 × 3350/100
= 23450/100 = $234.5
Thus, simple interest for 1 year = $234.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $234.5 × 2 = $469
Thus, Simple Interest (SI) = $469
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $469
= $3819
Thus, Amount to be paid = $3819 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(3) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(5) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(9) What amount does John have to pay after 5 years if he takes a loan of $3200 at 8% simple interest?
(10) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.