Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
Correct Answer
$3876
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 7% × 2
= $3400 ×7/100 × 2
= 3400 × 7 × 2/100
= 23800 × 2/100
= 47600/100
= $476
Thus, Simple Interest = $476
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 = $3400 + $476
= $3876
Thus, Amount to be paid = $3876 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 = $3400
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 7% × 2)
= $3400 + ($3400 ×7/100 × 2)
= $3400 + (3400 × 7 × 2/100)
= $3400 + (23800 × 2/100)
= $3400 + (47600/100)
= $3400 + $476 = $3876
Thus, Amount (A) to be paid = $3876 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 $3400, the simple interest in 1 year
= 7/100 × 3400
= 7 × 3400/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $238 × 2 = $476
Thus, Simple Interest (SI) = $476
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $476
= $3876
Thus, Amount to be paid = $3876 Answer
Similar Questions
(1) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(3) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(5) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(6) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.
(7) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(9) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?