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) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?
(2) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
(5) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(7) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(8) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(9) If Michelle paid $5940 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10317 to clear the loan, then find the time period of the loan.